Long searches, skyrocketing prices, and diminishing quality. Sydney has become a landlord’s market, and desperate renters are paying the price.
Advertised bedrooms that are no bigger than closets. A stair railing hanging loose from the wall. Bathrooms that don’t have a door. Mould — and a lot of it. None of these details mentioned on a recent rental listing asking for upwards of $1,000 in rent a week.
For people who haven’t been on a rental hunt in a while, this might sound like a horror story. But for those looking for a somewhat affordable home in Sydney’s inner-city suburbs, it’s a Saturday morning bingo card.
Here’s how it often plays out.
Before you’re even through the door, you’ll be standing alongside up to 30 other hopefuls. You’ll then be shuttled through the property, back to back, elbow to elbow, in an allotted 15 minutes.
In the end, you find out at least three other groups have already offered above the asking price.
And then, with fingers crossed, it’s straight on to the next inspection.
Rental vacancy rates across Greater Sydney dropped to 1.4 per cent in April, according to Domain, with the number of vacant rentals halved in the three months between December and March. Meanwhile, the median weekly asking price for a rental house is at a record high.
In other words, Sydney is currently what you call a “landlords’ market”.
Across the country, most states are seeing similar surges. According to Domain’s latest rental report, the median price for house in Australian capital cities rose to $508 in the first three months of the year — the highest it’s ever been.
It’s a far cry from the height of the pandemic, when the lack of international migration drove down rental prices and drastically increased vacancy rates. Across Greater Sydney, the vacancy rate peaked at 3.8 in April 2020, with similar highs recorded later in the pandemic.
The impact of the current boom is palpable at rental inspections, as prospective tenants share stories of long searches, budgets above what they can afford to pay, and disappointment at the quality of what’s available in their price range.
And the crisis is not confined to the inner city. Mary Thoms has been looking for a property for herself and two young grandchildren in the Liverpool area since Christmas last year. At this point, she says she’ll take whatever she can get.
“Waking up early in the morning, the first thing is that thought: get a house, a place, so you can have a roof over your head.”
“Every Friday I’m looking at Domain to see if there are any good houses or even units, that are three-bedroom and spacious.”
“But at the inspections, there’s a lot of people, so you get rejected. It’s heartache, I’m just tired of looking.”
We speak to Mary outside an inspection for a four-bedroom townhouse in Casula in Sydney’s west. At $580 a week, it’s above the median price for the suburb — but well below the cost in suburbs closer to the CBD. The grandmother is currently living in a unit in Blacktown, which has been plagued with break-ins and maintenance issues that have not been fixed.
Even though the price is above what she would like to pay, Mary says she’s going to apply for the property. But she’s not feeling optimistic. “They’re all going to apply,” she says, referring to the handful of other groups there for the inspection. “So we’re going to apply, too.”
The outward push
The real estate agent also expects the property to go quickly; it’s a modern family home with a yard, located right near Casula Public School.
It’s exactly the type of property currently in short supply and high demand in south-west Sydney, according to Michael Busdon, the property manager at Raine and Horne Liverpool.
“During the pandemic, house rentals increased and apartment rentals dropped, and we had to offer people rent reductions in order for them not to vacate their apartments,” he says.
“It seems that house rental hopes have bolted a little, and now apartments are having their turn.”
In a “normal market”, he says, you would usually expect between five and eight people at a house inspection in his area. Now when a house is on the market, assuming it’s in good condition and well-located, it’s in excess of 16.
To explain this you only need to look at the real estate’s print-out of available properties; during the pandemic, it was four to five double-sided pages long — now it’s down to one page, front and back.
“I have seen it worse than this,” he says, referring to the early 2000s, when people would submit their application forms with cash attached “as a bribe”. Thankfully, he hasn’t seen that happen this time around, but adds: “This could be just the beginning”.
Unlike those queuing up for inspections, Michael doesn’t see the booming rental market as an entirely bad thing. “It depends what side of the fence you are on,” he says, “if you’re a tenant, you’re probably not liking what is happening, if you’re a landlord, you’re probably feeling a little bit relieved.”
That’s because for the first time in years, as migrants return to Sydney after border closures and renters get back to business as usual, landlords are in a position to increase rents — just as the reserve bank lifts interest rates for the first time in 11 years, adding to the monthly cost of mortgages.
While there are major differences between the city rental market compared to the outer suburbs — the median rental price for a house in Blacktown in Sydney’s west is exactly half that of the inner-city suburb of Surry Hills — Michael sees it as more of a continuum: when vacancy rates drop in the city centre, people start to nudge outwards out of desperation, eventually driving up prices and demand elsewhere.
“Gentrification happens in the rental market too,” he says.
Playing the guessing game
Even with the push outwards, many are still scrambling to be close to the city whether it be for work, lifestyle, or convenience. Especially as prices increase across the board.
“I’m in the Campbelltown area which is just as expensive as the inner west,” says 20-year-old Laila Sumner. “I’m in a one-bedroom that doesn’t even have a proper bathroom, just a toilet and a shower, and I still pay $300 a week.”
Laila is hoping to move to the inner west with her partner to be closer to her job in the city, but outside an inspection for a two-bedroom apartment in a nondescript, red-brick building in Marrickville, the pair aren’t optimistic about their options.
“The first place we looked at was a bit of a slum, it smelt of mould,” Shay Wilson, 22, says. “It was a terrace house that had been broken up into four separate apartments. I was like, ‘ah, maybe not’. Everyone walked in and then straight back out.”
As for the Marrickville apartment, advertised for $430 a week, the review wasn’t much better. While it fell within their $400 to $500 a week budget, it was old and severely lacking in built-in storage.
“It’s almost like a guessing game,” Laila says.
“Nothing seems like it’s priced fairly at all — it’s kind of like ‘Oh I think people will pay this for that house, let’s just put it at that’.”
At the same inspection is 25-year-old Madison McGrail who has good reason to be looking for a new place: she’s just broken up with her partner who she lives with in Redfern.
But timing is not on her side; since her most recent move in June last year, she says there are fewer available options and the ones that tend to be lower quality — even with a bigger budget of $550 a week. “It’s just yucky apartments out here,” she says. Of the six places she’d inspected so far, she hadn’t applied for any.
“The level of quality that people think they can show houses in [isn’t acceptable],” she says. “I was at one the other day, and I was like ‘is this place going to get cleaned again before we move in?’.”
Eirene Tsolidis-Noyce is the general secretary of the newly-formed Renters and Housing Union (RAHU). The organisation was formed in response to the COVID pandemic, in an urgent bid to ensure renters who lost work as a result of lockdowns were able to remain in their homes.
But as the pandemic has progressed, and lockdowns have eased, their attention has turned to issues within the home. “We have black mould, seriously urgent repairs, hot water that’s not running, electricity that’s gone wrong,” she says.
“The broader trend is that the properties we are living in are not kept to a minimum standard and the responses we receive from agents on our own, as tenants, are not adequate.”
The time frames set out for landlords to respond to repairs differs between states. In NSW, tenants can organise for any urgent repairs — including broken hot water systems, blocked toilets, gas leaks, and broken stoves — to be fixed themselves and be reimbursed if the cost is under $1,000 and the landlord had a reasonable opportunity to respond to the request.
But when it comes to non-urgent repairs, such as a broken dishwasher or mould, there’s no avenue for tenants to go it alone with a guarantee to get their money back.
Eirene says these sorts of requests often go answered. Part of this comes down to the lack of property availability: there’s no urgency to make expensive repairs or improvements when tenants know there are few other options.
On Crown Street in the trendy inner-city suburb of Surry Hills, a crowd has gathered outside an impressive looking three-story Victorian terrace. Despite the drizzling weather, the group huddle under umbrellas cradling takeaway coffees from the myriad of cafes on the block.
Listed at $1,200 a week for four bedrooms and two bathrooms, the property is the most expensive we visit. It’s also the most busy; between 30 to 40 people eventually show up for the inspection.
At least one group is quick to walk straight back out. “In the photos it looks like it’s got bright lights or it’s in the middle of the day,” says Scotty Bensley, who arrived in Sydney late last year from New York. “But when you go in the house it’s super dark. There’s a bit of Photoshop work.”
For about two months, Scotty has been on a “mad hunt” for a place with his two friends after his temporary accommodation in Pyrmont began leaking.
The group are realistic about the cost of living in the inner city — they’re looking at any and all suburbs surrounding the CBD, from Surry Hills and Paddington to Newtown and Marrickville — and each person is prepared to pay up to $400 a week for their room. The most-recent place they applied for they negotiated above the asking price, but so far, it hasn’t been enough.
“We’re all 29 and 28, working men, but I guess there’s a perception of a party house, young guys — we just want to find somewhere to live,” he says.
Recent university graduate Lola Trajkovic is also at the inspection hoping to find a share house for herself and three friends. After landing a full-time job, it’s the 22-year-old Northern Beaches resident’s first foray into the rental market.
She thought the house was nice, but after speaking with the real estate agent, she says she was told they expect people to offer above the asking price — excluding her from the race.
“We’ve been looking at property websites for a couple of months, and I’ve found that even in the past two months they’ve increased in price,” she says.
“We haven’t started applying yet, but we’re expecting to have a lot of trouble.”
“Our expectations at the moment is that we will start looking, then we’ll reassess, we’ll lower our standards, and come back and try again.”
After a tough two years, real estate agent Tom Jones believes it’s a positive time for landlords, many of who took a significant hit to their normal cash flow during the pandemic.
This, he says, is because the cost of owning property in Sydney is also “drastically high”. “Even though these rents seem to be high for tenants, if you’re an investor looking at it on a yield basis, it’s still not a good return.”
As the leasing and new business manager at Village Property, an agency that specialises in rentals across the Sydney metro area, north shore, southern suburbs, and Parramatta, Tom’s witnessed firsthand what he calls “a drastic change in the market” that began towards the end of January summer holidays.
But while that means good news for his clients, he’s sympathetic to the plight of renters: “It’s definitely difficult in this market for renters to get their applications approved because there’s a lot of options for landlords.”
With more competition, Tom says applicants are finding innovative ways to get noticed. While many with the means go straight to the offering more money route, others are trying a more personal approach; some are calling agents directly ahead of time “so they know who you are”, while others bring along printed out biographies or statements to the inspection.
But asked what the best thing applicants can do to secure the keys, Tom returns to old-school advice.
“If you’re really good at submitting your application with all the documents and information, and have everything ready like your references and tenancy ledger, it makes it easier for us to present your application to the owner quicker,” he says.
“[It’s also] important to build that rapport at the inspection and let the agent know that you’re interested, that way we know where to spend our time and efforts looking into things.”
The hunt continues
Two weeks after meeting Mary at the inspection in Casula, we gave her a call to ask how she went with the application. As of last Saturday, she hadn’t heard anything back.
“It’s pretty disheartening when you don’t hear from them,” she says. “It gets so exhausting that you say you’ll take whatever, but still that’s not even happening. It’s just waiting, waiting, waiting, and then you continue the search.”
She’s since widened her radius, meaning she’ll be looking at places further away from where her children live. But she’s desperate, and there’s a deadline looming: her grandson is celebrating his third birthday in June and she’d like to do something nice in a new home.
“It’s all about the children, as long as I have a nice place for the children,” she says. “But finding a decent one is like winning the lottery.”
Words: Maani Truu
Photographs: Jack Fisher