Proving there is strength in the property investment market, rents across greater metropolitan Sydney jumped 6.4 per cent in the 12 months to September.
The sharp increase in the median rental price was most noticeable in the inner city Local Government Areas (LGAs) and in the Hunter region, with the Leichhardt LGA in Sydney's Inner West experiencing the largest increase for a two bedroom unit and the second largest for a three bedroom house.
According to a report by PRDnationwide, the Randwick LGA in Sydney's east recorded the largest increase in median rent for a three bedroom house, equating to 14.3 per cent between September 2010 and 2011.
The report also found that houses in the Waverley LGA had recorded the highest rents of $980 per week – a 12 month growth of 8.9 per cent.
"Around Sydney the local council of Botany Bay recorded strong increases in new bonds for the past three consecutive quarters, with a September growth equating to 18.4 per cent from the same period in 2010," report author Reuveni Etzioni said.
"While growth around the Hunter is generally related to the intensification of mining activities, the Botany Bay LGA recorded strong growth in new unit bonds, likely as a result of large unit complexes in the suburb of Mascot."
Richard Movsessian, director of Century 21 Coastline Properties has worked in and around Botany Bay for 18 years and has noticed significant change of the last six to 12 months.
“Many years ago Botany Bay and the surrounding suburbs had this reputation of an industrial area and attracted very little interest,” Mr Movsessian told Real Estate Business.
“In the last six months I have seen a strong surge in investment activity as the region now represents the last affordable area in the Eastern Suburbs.”
“This growth in interest has changed the area rapidly, as the demographics have shifted from middle aged families to young workers who want to be closer to the city. We are seeing trendy coffee shops open, yoga studios, and boutique outlets…these are things you wouldn’t have seen 15 years ago.”
The researcher said another consistent performer was the Fairfield LGA in Sydney's West, which experienced steady growth in lodgements over the past 12 months.
Rural local government areas were also analysed – revealing price gains were largely associated with mining activity.
"In the Gunnedah LGA, the coal mining industry has attracted workers from urban areas, interstate and across the Tasman, which resulted in a sharp increase in demand for rental properties," he said.
"This trend has been extended to the Tamworth Regional LGA, with several employees who work in Gunnedah basing their families in Tamworth, which offer a higher level of amenities."