Sydney’s rental market is experiencing intense pressure as demand outstrips supply, leaving many renters scrambling to find homes. With vacancy rates at historic lows and rent costs on the rise, those dealing in the rental market Sydney face significant challenges.
This article explores the trends shaping the rental market Sydney in 2024, what’s driving these changes, and how renters can adapt to the evolving landscape.
Current Trends Shaping Rental Market Sydney
Sydney’s rental landscape has seen some big shifts. Right now, renters are dealing with a mix of challenges. Low vacancy rates, a growing city, and soaring prices are just some of the trends making life tougher for tenants. So, what’s driving these changes?
Here are the eight key factors shaping the rental market in Sydney today. Let’s dive into each one and explore how they impact renters across the city.
1. Low Vacancy Rates Creating Rental Scarcity
The vacancy rate in Sydney’s rental market is currently one of the lowest in Australia, hovering around 1.3%. This means that only a small fraction of rental properties are available at any given time, leaving prospective tenants with limited options.
Popular areas like Northern Beaches and Sutherland Shire have seen even lower vacancy rates, sometimes dipping below 1%. This scarcity drives up competition, making it challenging for renters to secure homes in desirable locations.
As a result, properties are often leased within days, if not hours, of being listed. The low vacancy rate has been exacerbated by factors such as population growth and a slowdown in new housing developments, which have both contributed to a highly competitive market.
2. Rental Property Shortage
The rental property shortage in Sydney has been a significant driver of rising rents. During the pandemic, a wave of property sales saw many investors selling off their assets to capitalise on surging house prices, resulting in fewer rental homes available.
Additionally, some owner-occupiers chose to sell and rent temporarily, further limiting the supply. This has pushed the average rent in Sydney Australia to new heights, as more people compete for fewer available properties.
The shortage is particularly noticeable in high-demand areas, where renters often face long waiting lists and bidding wars just to secure a viewing.
The lack of available rentals has left many renters either forced to pay premium prices or to consider less convenient or affordable locations, contributing to the city’s rental strain.
3. Slowed Construction of New Apartments
The supply of off-the-plan apartments has significantly decreased over the past few years due to rising construction costs and material shortages. This has led to fewer new developments reaching the market, resulting in a further shortage of rental properties.
Construction projects that were planned or underway have faced delays or been put on hold, as developers struggle with increased expenses. In some cases, the cost of building materials has more than doubled, making it challenging for developers to complete projects at their intended budgets.
Compounding this issue are stricter rental regulations, which have deterred some investors, especially those who may have otherwise invested in Sydney rental properties to meet demand.
With a slow pipeline of new apartments, the existing housing shortage is expected to persist, keeping the pressure on renters.
4. Sydney’s Growing Population Adds Pressure
Sydney’s population growth has continued steadily, attracting international students, skilled workers, and those seeking to live in one of Australia’s most dynamic cities. This influx has placed additional demand on the rental market Sydney, particularly in areas close to the Central Business District and major universities.
The city’s population growth has increased pressure on housing availability, with fewer properties to accommodate the growing number of residents. A report from the Australian Bureau of Statistics highlights that Sydney saw a 2.4% pop ulation increase in 2023, with more growth projected over the coming years.
This trend is unlikely to slow down, which means the demand for rental housing will only increase. For renters, this translates into fewer options and higher prices, especially in desirable central areas.
5. Economic Growth and Job Opportunities
Sydney’s robust economy is a significant factor in the heightened demand for rentals. With industries such as finance, technology, and tourism booming, Sydney attracts job seekers from across Australia and internationally.
This economic growth has contributed to rising apartment for rent Sydney prices, as more people relocate to the city in pursuit of career opportunities. Sydney’s economic prosperity has also given renters more purchasing power, allowing them to compete for properties in sought-after neighbourhoods.
However, this has created a challenging environment for those on lower incomes or with limited budgets, as they often find themselves priced out of desirable locations.
The city’s job market has consistently attracted new residents, maintaining the pressure on the rental market and keeping prices high.
6. Post-Pandemic Shift Back to the City
During the COVID-19 pandemic, many Sydneysiders moved to regional or coastal areas, taking advantage of remote work flexibility. However, as offices reopened and urban life resumed, a significant number of these residents have returned to the city. This shift has renewed demand for rentals in central suburbs, driving up competition and prices.
Data from Sydney’s public transport system reveals that city centre foot traffic is at its highest level since early 2020, reflecting a renewed preference for urban living. With more people moving back to the city, the Sydney rental market has become even more competitive, especially in areas near major business hubs.
This trend is particularly evident in suburbs like Pyrmont, Darlinghurst, and Surry Hills, where demand for rental properties has surged in recent months.
7. Shifting Preferences in Rental Needs
The pandemic has not only changed where people want to live but also the type of properties they seek. Many renters are now prioritising larger spaces, with features like home offices, outdoor areas, and additional storage becoming more desirable.
The demand for comfortable and versatile living spaces has led to an increased interest in Sydney rental properties that can accommodate these new needs. For instance, families and professionals working from home are now seeking rentals with dedicated office spaces or extra rooms that can be repurposed.
As these preferences continue to evolve, properties with these features are being rented more quickly and often at a premium, leaving limited options for renters with more traditional needs.
8. Rising Rental Prices
The combination of high demand and limited supply has resulted in rapidly increasing rental prices across Sydney. Suburbs like Canterbury and Merrylands-Guildford have experienced substantial rent hikes, with some areas seeing increases of up to 50% in just one year.
On average, rent in Sydney for houses is now over $1,000 per week, while units average around $695, reflecting a year-on-year rise of more than 13%. For many renters, this means adjusting their budgets or relocating to more affordable areas.
These rising costs are driven by a variety of factors, including limited property availability, strong economic growth, and the ongoing demand for rental housing.
As prices continue to climb, renters may increasingly look to the cheap areas to rent Sydney or explore shared accommodation options to manage costs.
Is Sydney Facing a Rental Crisis?
Absolutely. Low vacancy rates, a lack of new rental properties, and strong demand have all pushed Sydney’s rental market into a crisis. And it’s not likely to improve soon. With more people moving to Sydney and few new homes being built, the pressure on rents will only grow.
Many tenants are already stretching their budgets, and those who can’t afford the rising costs are finding it harder to stay.
For some, this means sharing homes or signing longer leases just to avoid the hassle of searching again. Although the government has stepped in with plans to ease the crisis, new policies have yet to bring substantial relief.
Balancing tenant protection with investor interest is crucial if Sydney wants a stable rental market. For now, it’s clear that renters face an uphill battle.
Why Are Sydney’s Rents So High?
Sydney is known for its pricey real estate, but rents are now higher than ever. The city’s median rent has hit record levels, far above the national average.
Why? For starters, there’s a mismatch between the demand for housing and the available supply. Sydney also boasts some of the most sought-after neighbourhoods, which adds to the pressure on rental prices.
In fact, Sydney consistently ranks among the world’s most expensive cities, drawing people in but driving up costs in the process. These factors combine to make Sydney one of the most challenging rental markets in the country.
What’s Causing Sydney’s Rental Shortage?
It all comes down to supply and demand. Fewer rental properties are available because more investors are selling up or choosing not to buy. Recent data shows that investor activity has dipped, with fewer people buying rental properties now compared to years past.
At the same time, new builds have slowed. The pandemic brought rising construction costs, which, paired with higher inflation, has driven some building companies out of business.
As a result, fewer homes are hitting the market, and this shortage only adds to Sydney’s rental pressures. Without more rentals, the market will stay competitive—and pricey.
Comparing Rental Costs in Sydney’s Top Suburbs
CoreLogic’s latest quarterly rental review for Q3 of last year shows that Sydney remains the most expensive rental market in Australia, with the typical property costing $726 per week.
Vaucluse, a harbourside suburb, holds the top spot as the city’s—and the country’s—most expensive suburb to rent, with median weekly rents reaching a steep $2,588 and a yield of 1.67%. It’s hardly surprising, given that the median house price in Vaucluse stands at just over $9 million.
Close behind are two other affluent eastern suburbs: Bellevue Hill, with a median rent of $2,240 and a 1.43% yield, and Rose Bay, where the median rent of $2,174 yields 1.83%. In fact, nine of the top ten priciest suburbs for renting in Sydney are located in the Eastern Suburbs.
The only exception is Mosman in the north, where rents average $1,921 per week with a 2.07% yield.
The Eastern Suburbs, Northern Beaches, and North Sydney areas dominate the list of Sydney’s 30 most expensive rental suburbs. Meanwhile, Burraneer in the Sutherland Shire ranks at 28th, with weekly rents averaging $1,482.
Top 30 High-Cost Rental Suburbs in Sydney
| Rank | Suburb | Median Value (million AUD) | Property Type | Median Rent (AUD per week) | Gross Rental Yield (%) | Vacancy Rate (%) |
| 1 | Vaucluse | $9.06 | House | $2,588 | 1.67 | 4.8 |
| 2 | Bellevue Hill | $9.54 | House | $2,240 | 1.43 | 3.2 |
| 3 | Rose Bay | $6.41 | House | $2,174 | 1.83 | 2.0 |
| 4 | Double Bay | $6.24 | House | $2,078 | 1.79 | 4.5 |
| 5 | Dover Heights | $6.30 | House | $1,994 | 1.87 | 3.6 |
| 6 | Bronte | $5.15 | House | $1,962 | 2.07 | 2.9 |
| 7 | Mosman | $5.48 | House | $1,921 | 1.87 | 2.5 |
| 8 | Clovelly | $4.16 | House | $1,918 | 2.44 | 0.6 |
| 9 | Woollahra | $4.73 | House | $1,890 | 2.00 | 4.0 |
| 10 | North Bondi | $4.46 | House | $1,888 | 2.23 | 1.5 |
| 11 | Bondi | $4.11 | House | $1,846 | 2.32 | 0.7 |
| 12 | Clontarf | $4.78 | House | $1,784 | 2.06 | 2.2 |
| 13 | Balgowlah Heights | $4.22 | House | $1,773 | 2.27 | n/a |
| 14 | Queens Park | $3.96 | House | $1,767 | 2.32 | 1.4 |
| 15 | Coogee | $3.75 | House | $1,765 | 2.48 | 2.4 |
| 16 | South Coogee | $3.59 | House | $1,752 | 2.55 | 1.7 |
| 17 | Waverly | $3.64 | House | $1,674 | 2.33 | 1.3 |
| 18 | Paddington | $3.25 | House | $1,652 | 2.48 | 1.5 |
| 19 | Bondi Junction | $2.87 | House | $1,618 | 2.78 | 1.7 |
| 20 | Seaforth | $3.58 | House | $1,613 | 2.39 | 2.4 |
| 21 | Fairlight | $3.83 | House | $1,597 | 2.21 | 0.5 |
| 22 | North Bridge | $4.84 | House | $1,589 | 1.73 | 4.2 |
| 23 | Castlecrag | $4.32 | House | $1,501 | 1.77 | 3.8 |
| 24 | Longueville | $5.06 | House | $1,501 | 1.56 | 1.4 |
| 25 | Randwick | $3.17 | House | $1,498 | 2.45 | 0.9 |
| 26 | Castle Cove | $3.93 | House | $1,498 | 1.92 | 2.2 |
| 27 | North Curl Curl | $3.34 | House | $1,496 | 2.31 | n/a |
| 28 | Burraneer | $3.21 | House | $1,482 | 2.34 | 3.0 |
| 29 | Balgowlah | $3.32 | House | $1,479 | 2.38 | 1.0 |
| 30 | Curl Curl | $3.70 | House | $1,444 | 2.05 | 3.4 |
Top 30 Budget-Friendly Suburbs for Rent in Sydney
While these high-end prices reflect the premium side of Sydney’s rental market, more affordable options can be found in the Inner West, Outer West, and South West regions, as well as on the Central Coast. These lower-priced rentals are largely units rather than houses.
| Rank | Suburb | Median Value (AUD) | Property Type | Median Rent (AUD per week) | Gross Rental Yield (%) | Vacancy Rate (%) |
| 1 | Carramar | $401,034 | Unit | $389 | 5.16 | 0.8 |
| 2 | Cabramatta | $432,483 | Unit | $391 | 4.67 | 0.3 |
| 3 | Canley Vale | $439,313 | Unit | $402 | 4.72 | – |
| 4 | Berkley Vale | $379,669 | Unit | $410 | 5.63 | 1.4 |
| 5 | Fairfield | $396,190 | Unit | $420 | 5.54 | 0.3 |
| 6 | Leumeah | $452,742 | Unit | $424 | 4.98 | – |
| 7 | Jamisontown | $462,139 | Unit | $429 | 4.66 | 0.8 |
| 8 | Wyong | $483,430 | Unit | $430 | 4.91 | 2.9 |
| 9 | Warwick Farm | $409,386 | Unit | $434 | 5.72 | 1.0 |
| 10 | Cranebrook | $658,165 | Unit | $437 | 3.50 | 2.0 |
| 11 | Gorokan | $498,269 | Unit | $437 | 4.69 | – |
| 12 | Minto | $504,327 | Unit | $439 | 4.45 | – |
| 13 | Bradbury | $457,804 | Unit | $450 | 5.27 | 0.7 |
| 14 | Liverpool | $438,000 | Unit | $453 | 5.52 | 0.7 |
| 15 | Jordan Springs | $575,767 | Unit | $453 | 3.97 | – |
| 16 | Mount Druitt | $422,833 | Unit | $454 | 5.22 | 0.9 |
| 17 | Kingswood | $512,182 | Unit | $455 | 4.67 | 0.9 |
| 18 | Macquarie Fields | $564,455 | Unit | $457 | 4.28 | – |
| 19 | Werrington | $548,693 | Unit | $459 | 4.65 | 1.1 |
| 20 | Richmond | $542,096 | Unit | $463 | 4.31 | 0.5 |
| 21 | St Marys | $556,185 | Unit | $468 | 4.64 | 0.4 |
| 22 | Penrith | $517,508 | Unit | $469 | 4.78 | 1.0 |
| 23 | Ingleburn | $554,367 | Unit | $471 | 4.47 | 0.2 |
| 24 | Glenfield | $616,211 | Unit | $472 | 4.02 | 0.3 |
| 25 | The Entrance | $632,715 | Unit | $473 | 4.03 | 2.2 |
| 26 | Campbelltown | $510,525 | Unit | $479 | 4.76 | 0.1 |
| 27 | Berala | $538,704 | Unit | $486 | 5.20 | 0.4 |
| 28 | Chipping Norton | $590,798 | Unit | $486 | 4.55 | 0.4 |
| 29 | Tregear | $645,195 | House | $487 | 3.77 | 0.9 |
| 30 | Long Jetty | $715,647 | Unit | $488 | 3.70 | 0.7 |
Dealing with the Rental Market Sydney
The rental market Sydney presents both opportunities and challenges. As demand continues to exceed supply, renters face tough competition and high prices. However, by understanding the trends driving this market and exploring a range of suburbs, it’s possible to find affordable rental options that meet your needs.
With careful research and a flexible approach, securing a rental in Sydney’s bustling property market is achievable.
Discover Your Ideal Rental in the Sydney Market
Ready to find your place in the rental market Sydney? Aceland offers a range of rental solutions tailored to your needs, whether you’re seeking an affordable apartment for rent Sydney or a family-friendly home. Explore Sydney’s diverse rental landscape with Aceland today.
