Sydney rents up?

Was just reviewing market rentals for our Petersham IP as lease is up in 70 days.......haven't been paying much attention and was surprised to see that the market for a 2br/1bt/0pk is now up around $600pw

• https://www.domain.com.au/1-333-stanmore-road-petersham-nsw-2049-11618105
  $600pw Petersham (probably over priced as main road)
  
  
• https://www.domain.com.au/3-19-railway-street-petersham-nsw-2049-11611396
  $600pw Petersham (nicer condition but no yard)
  
  
• https://www.domain.com.au/1-23a-the-boulevarde-lewisham-nsw-2049-11611896
  $600pw Lewisham
  
  
• https://www.domain.com.au/156-edinburgh-road-marrickville-nsw-2204-11606704
  $595pw Marrickville
  

Our place is a ground floor of 2story block with exclusive use of common space backing on to a park (but has bad light in 1 of the br) so the new lease at $600pw will be $25 more pw than 12 months ago, or approximately a 4.3% increase.

Are you seeing similar rental increases over the last few months for your Sydney rentals?

The last rental renewal we did in July was only 3% over the previous year and wondering if mortgage rate increases by the banks are filtering through to the rental market across the board.

 

Rental prices work on supply & demand, and have no bearing on what the banks are doing.

 

Poppycock....landlords feeling the pressure from banks...push up rents as interest rates go up....rents go up - its simple.

I don't know why people think when interest rates go down and prices go up..."that this is bank related" but when the inverse happens....its magically "renters controlling the market".

 

You ask rental prices based on whatever prices the market will bear... if you can't attract a tenant at a certain price, landlords drop their prices. Alternatively, if a property has a lot of demand, prices tend to push upwards and landlords have the luxury of being choosy for tenants. I've had tenants offer more than what I had advertised because so many people wanted to rent it.
So prices go up.
Simple supply and demand.

So, not much demand in Perth, Darwin, Brisbane... rents go down. Higher demand in Sydney and Canberra, prices go up. I think even higher demand in Hobart (though I don't regularly monitor there)....

 

Yeah....Sure.....

Seriously, a Landlord can ask what he wants for his property, but that doesn't mean that a tenant will rent it.

If there are 100 similar properties for rent in an area, and not a lot of tenants wanting to rent in that same ares, a tenant has a heap of choice. Landlords will start to give incentives & reduce prices just to get a tenant.

On the otherhand, when there are heaps of tenants looking to rent in an area, and very few properties available, landlords are able to increase prices.

 

Chockycock! Less people invest or sell as rates increase, this creates less supply which pushes up demand which pushes up rents. If everyone still holds while rates increase rents go nowhere.

 

As long as a few other landlords in my areas feel the pinch and start advertising higher rents, I can cite these as being reflective of the market during lease renewals. Or try to at least.

The inconvenience of moving, finding a new place where the landlord and agent arent as response to repair asks or working through issues by good old communication, usually outweight the extra rent being asked.

 

Problem with Dean's argument is only that he can't be bothered spelling out each minute step alomg the way from bank to rental increase. Thanks biz for your brief sumnary. Gockie takes the opportunity to state the obvious - full points, of course.
I'll make a one-off attempt.

• APRA/banks bite investors
• investment purchases significantly decrease
• Simultaneously, first home buyers opportunity to benefit from incentives increases
• Some investors start to sell very tightly held negatively geared stock to first home buyers
• equals less rental stock available in the area
• equals rising rents
• (which eventually leads to renewed investor interest)