Why Sydney and Melbourne rents dived in 2020 as Perth, Darwin rents soared

How you can save hundreds of dollars a month: The suburbs in Sydney where rent has dropped more than 10 per cent – but it’s not all good news

  • Sydney apartment rents last year dived by 10.3 per cent to just $444.40 a week
  • For about that price, it is possible to lease an apartment in trendy Paddington
  • SQM Research has tipped a renters’ market in Sydney and Melbourne in 2021
  • The rest of Australia is a different story with rents surging in small capital cities
  • In Darwin, median house rents surged by annual pace 27.3 per cent to $603.40

Rents in Australia’s biggest city dived by double-digit figures in 2020 as the border was closed to foreign tourists and international students.

Australia is now a tale of two countries, with Sydney and Melbourne house and apartment rents diving as living costs for tenants went up almost everywhere else, especially in Darwin and Perth.

Sydney unit rents last year plunged by 10.3 per cent to a median weekly asking price of $444.40, SQM Research data showed.

For around that price, it is now possible to rent right near the city in an upmarket suburb with a one-bedroom 19th century terrace at Paddington going for $450 a week.

Sydney unit rents last year plunged by 10.3 per cent to a median weekly asking price of $444.40, SQM Research data showed. Pictured is a one-bedroom terrace at Paddington being leased for $450 a week

A two-bedroom unit in a 1950s brick block in that part of Sydney’s eastern suburbs is being leased for $500 a week.

The city by the harbour is no longer Australia’s most expensive place to lease an apartment, with Canberra now holding that title with typical rent of $473.40 – following an annual increase of 2.1 per cent.

Sydney has also lost its title as the priciest place to rent a house, with weekly leasing costs for a home with a backyard diving by 7.6 per cent in the year to January 4, 2021.

The asking price of $632.90 a week is behind Canberra’s $656.70, where rents last year climbed by 3.6 per cent.

Darwin, in Australia’s remote tropical Top End, is now Australia’s third most expensive capital city for house rents, following a mammoth 27.3 per cent increase that saw leases surge to $603.40.

For that price, a five-bedroom, three-bathroom house can be leased at Ludmilla across the road from a busy McDonald’s on Bagot Road near the airport.

Darwin, in Australia's remote tropical Top End, is now Australia's third most expensive capital city for house rents, following a mammoth 27.3 per cent increase that saw leases surge to $603.40.

Darwin, in Australia’s remote tropical Top End, is now Australia’s third most expensive capital city for house rents, following a mammoth 27.3 per cent increase that saw leases surge to $603.40.

Perth also saw rents soar with unit leases increasing by 12 per cent to $493.20 as house rents in the city climbed 9.3 per cent to $368.70.

The story was very different in Melbourne with apartment rents diving by 8.7 per cent to $376.90.

Hobart was the only mixed market, after several strong years, with house rents edging up 0.5 per cent to $470.30 as weekly unit leases fell 5.1 per cent to $388.50.

SQM Research managing director Louis Christopher said Australia’s border closure in March to foreigners had created two kinds of Australia for renters and property owners alike.

Perth also saw rents soar with unit leases increasing by 12 per cent to $493.20 as house rents in the city climbed 9.3 per cent to $368.70. Pictured is a house in upmarket Mosman Park being leased for $550 a week

Perth also saw rents soar with unit leases increasing by 12 per cent to $493.20 as house rents in the city climbed 9.3 per cent to $368.70. Pictured is a house in upmarket Mosman Park being leased for $550 a week

‘It’s clear Sydney and Melbourne apartment investors were the losers of 2020 with rents and prices falling,’ he said.

‘However, if you owned an investment property in Darwin or Perth, or indeed regional Australia, you have one of the best years ever.’

Mr Christopher expected inner-city rents in Sydney and Melbourne to increase in 2021, but not to pre-pandemic levels.

‘I don’t think it’s going to be a complete reversal,’ he said.

‘Demand for inner-city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns.

‘This will mean 2021 will remain largely a tenant’s market in the inner cities but will also very much remain a landlord’s market for regional Australia.’

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