Sydney - rents now at their highest level ever recorded
While Sydney ’ s house price growth dominated headlines during the pandemic , strong rental growth was also occurring . This was surprising given that the city lost a lot of people to Queensland over this time , but was likely driven by wealth effects ( people able to upgrade to better homes ), as well as higher levels of household formation ( people moving out of share households , out of family homes etc ).
Now that the pandemic is behind us and price growth is slowing , greater opportunities are likely to show up for many investors , provided they ’ re not looking for a quick capital return . Rental yields are improving and although price growth is unlikely to be strong for the time being , Sydney ’ s population is starting to increase again which will underpin demand for property . At the same time , construction costs are rising which will limit housing supply .
Looking in more detail at the suburbs that ’ ve seen the biggest increases and declines in rents shows the variability in rental growth at the top end of the market . Darling Point and Vaucluse , two of Sydney ’ s more expensive suburbs , saw the biggest increase in advertised rents per week . At the other end of the spectrum , Willoughby East and Clontarf saw the biggest declines .
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