Rental Unit in Sydney

Rental cost of units in Sydney contimues to rise, as the investment in housing seems to have stalled. Demand continues to rise with a healthy migration program. Fair priced units can still be found with some diligent research.

The Sydney Morning Heralds reports: WEEKLY rental prices for Sydney houses rose by almost $65 over the past 12 months, says a report from Australian Property Monitors.

The median asking rent for houses in the city has climbed 16.9 per cent to $450 a week since December 2007.

But prospective tenants appear to have put the brakes on apartment rents, with asking prices for units remaining stable at $400 a week for the third consecutive quarter.

"The growing population of renters in units will be pleased to hear that their landlord's appetite for hiking up the rent seems to be diminishing," the monitor's senior economist, Liam O'Hara, said.

APM, which is owned by Fairfax Media, publisher of the Herald, bases its figures on the asking rents advertised on real estate websites.

Mr O'Hara said it was difficult to account for the contrast between continuing increases in house rents and the unchanged rents for flats. "It could just be that landlords have racked up rental prices on homes more than units," he said.

The real estate analyst Louis Christopher, of SQM Research, said the APM data indicated a change in the rental market.

"We think over the past two years landlords have been going for the land grab, and at first they succeeded. But that is no longer the case and we have noticed a change in the market since mid last year," Mr Christopher said.

He said part of the reason apartment rents had remained stable was because he believed rental vacancies were much higher than the 1.1 per cent figure reported by the Real Estate Institute of NSW in December.

Mr Christopher said the vacancy rate for Sydney was about 3.6 per cent in December, largely because many of the apartments that investors had hoped to sell were instead being put up for rent.

"A lot of landlords are reluctant landlords. They actually wanted to be vendors [and] they've put property on the rental market [and] that's increased supply."

BIS Shrapnel's property analyst, Angie Zigomanis, suggested the weakening NSW economy was a factor in the stable rents for apartments.

"There may be an element of tenants not being capable of paying more, perhaps hitting the limit," Mr Zigomanis said.

Chris Martin from the Tenants Union of NSW said recent strong increases in rent could not be sustained because tenants "are already at full stretch".