According to PropTrack data, median rental prices have fallen or remained stagnant across over 250 Sydney locations, with some areas seeing decreases as high as $350 per week.
This marks a significant shift from the period between 2022 and 2024 when consistent rent increases were common throughout the city due to reopened international borders, increased migration, tight rental vacancies, and high interest rates.
The change comes as welcome news for many tenants, especially considering that almost half of NSW renters reported experiencing financial difficulty due to high rents.
Suburbs experiencing the most substantial rental decreases included Woollahra, Bondi Junction, Forest Lodge, Kensington, Beaconsfield, Peakhurst, and Matraville, where weekly rents fell between $100 and $350.
Numerous other areas saw declines of approximately $50 per week, potentially saving tenants around $2,600 annually.
Much of this reduction occurred during the past three months, coinciding with the Reserve Bank’s decision to cut interest rates.
PropTrack economist Anne Flaherty said the trend is positive for Sydney tenants who have faced the country’s highest rental costs.
“It’s really good news for renters,” Ms Flaherty said.
“The level we saw rent rises, particularly over 2023 was really extremely high and for a lot of renters it was that fear every time that negotiation time came around we were seeing some big jumps.”
She said that the areas experiencing the most significant drops were typically those with substantial apartment stock or in the higher end of the market.
“The fact that we have seen the rate of growth slowed to what’s hopefully a more sustainable level it’s given more people to plan ahead,” Ms Flaherty said.
The recent interest rate reductions have contributed to increased investor activity in NSW, with a 19 percent rise over the 12 months to March.
This influx of investors may be playing a role in the rental price decreases.
“Although increased investor activity isn’t great news for first home buyers, it can be a good thing in that it increases the supply of rental properties coming up for rent and can slow the rate of growth and provide a bit more supply and choice out there for renters,” Ms Flaherty explained.
According to Money.com.au, nearly half of Australian renters (47 per cent) would consider relocating to another suburb or city if it meant paying less rent, but only if the savings hit a clear tipping point.
Among renters who would up sticks for a discount, 22 per cent say they’d only move if rent was at least 20 per cent cheaper, 11 per cent would relocate for a 10 per cent discount, and 14 per cent are already searching for a more affordable area.
Meanwhile, 26 per cent of renters surveyed say they’d consider moving, but only if they could stay close to work, family or amenities.
Another 26 per cent say they either value their current location too much or are already in a stable rental setup, like a long-term lease.
Money.com.au’s Finance Expert, Sean Callery, says renters are weighing up more than just cost when it comes to relocating.
“Minor rent reductions aren’t enough to convince most renters to pack up and move, and for some, it also needs to come with minimal disruption to their work and family life,” Mr Callery said.
“But for younger renters, who are typically on lower incomes and earlier in their careers, even small savings may be enough to justify a move, especially if it helps them get out of the rental pool and closer to homeownership.”
