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“I would expect the risk (for renters) is that units do grow faster than houses because they are more affordable … and in more affordable areas you’re going to see more growth,” she said.
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“While the data shows conditions are easing somewhat, we are still seeing tight rental market conditions.”
Laing+Simmons head of property management Michael Anania said rents in beach suburbs had fallen the most because they had seen the biggest rent increases during the pandemic. Tenants were now facing a cost of living squeeze on all fronts.
“It’s all about affordability. I think they’ve reached their limit,” Ananya said.
“What we’re finding is they’re moving to areas a little bit lower down (on the northern beaches) and not as close to the water. They’re moving further inland. We’ve had three tenants do that recently. They’ve moved because they’re going back to the office three days a week and the costs are much higher (to go back to the office),” he said.
“And during the height of the pandemic, we had the flexibility to live where we wanted.”
Many large families are also moving into units, not only to find cheaper rentals but also because the demands of full-time work in big cities make maintenance costs lower, Ananya said.
Rent Fairy founder Sarah Elkordi said suburbs where rents were falling were a sign tenants had reached their limits and were no longer willing to pay such high rents for substandard properties.
“This is because the rents they are trying to achieve are unachievable and unrealistic,” she said.
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“People want quality homes but they want homes they can afford,” Elkodi added. “The prices for quality properties in the east are not what they want.”
She said wages were not keeping pace with rental growth in some of Sydney’s most sought-after areas, leading to reduced tenant demand.
Elcordy said one time a tenant no longer wanted to live in Bondi because not only was the rent high, but the building she lived in had defects that caused mold to grow in her rental unit, making her sick.
She also noted that demand for one-bedroom properties was weakening as more tenants chose to share homes to share rental costs.
“The need to be close to the beach is no longer realistic or achievable… People are looking for lower prices to suit their criteria and budget.”
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