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The high cost of living in Sydney

The high cost of living in Sydney

rent sydney

We know Sydney is one of the most expensive places to live in the world; and prices continue to escalate through the roof with demand at an all time high. There just simply aren’t enough properties to meet demand, and the apartments that do arrive the market are quickly snapped up by overseas investors.

Sydney is the second fastest growing city in Australia. The property market forecasts at least five years of development will be needed to accommodate the growing population and offset the lack of housing.

It’s not just the eastern suburbs of Sydney like Vaucluse, Mosman, Woollahra, and Hunters Hill that are asking for exorbitant rent. Increasing rental prices are spreading to the outer west regions of Sydney, including Canterbury, Wiley Park, Lakemba and Bankstown. Around Canterbury station, two-bedroom semis have recently been leased for up to $600.

Domain Group chief economist Andrew Wilson said, “apartment tenants will now likely spend an extra $100 a month compared to those signing a lease in June 2015.”

According to the Domain Group data, the three cheapest local government areas include Campbelltown and Wyong at $400 a week and Penrith at $410. Holroyd and Liverpool are the highest prices in the outer west region at $480 and $490 a week.

Comparatively, Lane Cove, Randwick and Willoughby are asking greatly inflated rent due to their more central location. Lane Cove and Randwick is more than double Campbelltown and Wyong’s asking price at the $925-$950 asking price. This pales in comparison to the inner city rates of renting, and the prices of areas in close proximity to public transport that cut the work commute time.

Over the year, the northern beaches saw the highest increase in asking rent – a rise of an astonishing 7.1% to $600 a week.

“The pressure on apartment rents is expected to remain in the short term, however with more supply in the next 12 months this pressure should wane,” said Mr Wilson.

There is a major shortage of housing in Sydney which is driving the demand and supply through the roof. Rental yields in Sydney are now the least attractive in the country, at 3.45% for houses and 4.11% for apartments. Investors are instead looking to south-east Queensland where higher yielding investment properties are available.

Despite the still increasing rental costs in Sydney, there will undoubtedly continue to be strong interest from tenants.

In the chart below you can see just how much more expensive Sydney is than any other Australian city. There is a $240 price  difference between the average asking cost of rent in Sydney versus the same in Hobart and Adelaide.

Image Credit Domain Group data, June 2016

Image Credit Domain Group data, June 2016

 


Scarlett is a recent journalism graduate interested in writing, human resource management and workplace culture. When she isn't being a nerd, she enjoys singing, reading and seeing friends.

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