More tenants are looking for properties in locations well away from the Sydney CBD, with new data showing a spike in rents for one and two bedroom apartments in particular since 2006 in these areas.
“Savvy investors are attuned to the changing preferences of renters and recognise the growing rental markets in the middle and outer suburbs of the metropolitan area,” PRDnationwide research analyst Oded Reuveni-Etzioni said.
PRDnationwide research revealed rents for two bedroom apartments in Campbelltown, Fairfield, Liverpool, Maitland and Canterbury grew faster than any other area in the Sydney Greater Metropolitan Region over the past five years.
“Investment opportunities also exist in areas outside the metropolitan area, where strong demand and limited supply of units maintains the pressure on rent prices,” Mr Reuveni-Etzioni said.
The research covered medium and high density dwellings in the Sydney Greater Metropolitan Region (GMR) which includes the Sydney metropolitan area, the Hunter and the Illawarra.
Not surprisingly the City of Sydney recorded the highest rent price for both one ($500 per week) and two bedroom units ($670 per week).
“Other LGAs to appear in top 10 highest rent prices list were Woollahra, Canada Bay and North Sydney,” said Mr Reuveni-Etzioni.
The Ku-Ring-Gai Local Government Area recorded the highest growth in demand – with an average of 22.6 per cent increase in new bonds lodged per annum for the past five years.
“The number of bonds held in the Ku-Ring-Gai LGA more than doubled since 2006,” he said.
“This indicates a shift in tenant demand from inner to middle and outer parts of Sydney metropolitan area.”
Other booming areas outside of the Sydney metropolitan area include the Cessnock and Maitland LGAs which both recorded a strong increase in the lodgement of bonds for strata-titled dwellings, with Maitland also recording one of the strongest five year average growths in rent prices at 10 per cent per annum for a two bedroom unit.
“The growth stems from large infrastructure projects that draw a transient population of construction workers, and from mining employees relocating to the Hunter and choosing to rent in the short term,” said the researcher.
Mr Reuveni-Etzioni said given the strong growth in rent prices in the middle and outer rings of Sydney and regional areas of the GMR, and the increasingly restrictive rent prices in Sydney’s inner ring, it is likely that lenders will continue their support for medium density developments in areas that until recently represented higher investment risk.
“This in turn will ensure that developers maintain a full project pipeline in the outer and regional parts of the GMR,” he said.