In 2018, rents dropped in Sydney for the first time in almost 12 years, according to new data from the Housing Industry Association (HIA).
The industry group said that an unprecedented volume of new homes (especially apartments) has become available since 2014. Essentially, five years’ worth of supply has become available in just four years. Hence, unmet demand is now being addressed and affordability has improved.
“This is a significant reversal of the trend. From December 2006 to June 2015, the pace of rental price increases exceeded inflation for every year, leading to real rents doubling in this decade,” said HIA Executive Director NSW David Bare.
The trend, though, will not continue unless nearly 50,000 houses enter the Sydney market each year.
“Rental prices rise when there is an insufficient supply of rental accommodation to meet demand. HIA has long argued that the solution to this problem is to increase the supply of new homes. To achieve this, there needs to be a more consistent supply of new dwellings and a determined effort by the NSW state government to reduce the cost of punitive taxes and levies on housing,” said Bare.