Tenants in Sydney could have no relief from rising rents for some time, says new data.
The Domain Group’s latest Rental Report showed that despite the record number of investors who have swamped the market during the past two years, and the extra apartment developments springing up around the city, there is still a shortage of rental accommodation especially in more affordable suburbs.
The report said this pushed up median house rents by four per cent last year – the highest of any capital – and units by two per cent.
Rents for houses were flat or falling in all other capitals except Hobart where they grew 3.2 per cent.
The median weekly rent for a house in Sydney now stands at $520, while for units it is $500.
Domain Group senior economist Andrew Wilson said there was no sign that this rental growth would slow down while there was a shortage of dwellings, which has been exacerbated by the shortage of new properties and the many migrants choosing to settle in Sydney.
"The only thing that will stop rents rising is an affordability barrier ... or more supply," Dr Wilson said.
"Once you get behind the eight ball significantly like Sydney has in terms of an undersupply of housing it's extremely difficult to rebalance it."
The report found that the highest rental growth was in more affordable areas such as the west and south west, and Dr Wilson said this was despite investors targeting these areas.
About one in three properties in Sydney is rented, and Dr Wilson estimates that this pool of properties could have increased by more than 10 per cent in 2014.