Sydney City & Pyrmont Rental Market Update May 2024

As an agency deeply entrenched in the Sydney CBD and Pyrmont rental market, we are aware of its nuances. Welcome to our Sydney CBD & Pyrmont Rental Market Update for May 2024. We are witnessing the rental market landscape in Sydney's inner city evolve, revealing an interplay of factors that warrant landlords' awareness and adaptation.

The Sydney CBD and inner-city rental markets are experiencing a gradual softening of rental prices, changing to reflect supply and demand. Despite vacancy rates for Greater Sydney remaining notably lower than usual, underscoring the persistent demand for housing in Sydney. According to CoreLogic data, rents in some areas of Sydney have reached record highs. However, it is essential to note that this is generalised reporting based on the entire city, which includes a vast spectrum of areas, demographics, and psychographics.

Reports indicate that this discrepancy could be due to the rising cost of living, forcing tenants to opt for more affordable suburbs further from the city and forgo an inner city property's convenience and lifestyle amenities. While demand remains high in Sydney in general, more granular data is indicating strains on affordability are increasingly palpable, creating a notable increase in the average number of days rental properties are on the market in the inner-city areas. This shift underscores the importance of landlords being strategic in their approach to marketing and pricing, ensuring timely occupancy and minimal vacancy.

One noteworthy behaviour we have observed among rental applicants is the tendency to apply for multiple properties, hedging their bets for fear of feeling like they may miss out due to competition or having pets, a large family, etc., and withdraw their interest post-agreement.

We believe this trend is being fuelled by media narratives and generalised market forecasts, reflecting a perception of heightened competition in the rental market. However, it is crucial to recognise that such forecasts may not accurately reflect the nuances of specific areas or suburbs, highlighting the importance of localised property insights.

With many premium properties attracting executive tenants, landlords must be aware that this group is not immune to the changing dynamics of the market. Many executive tenants have their own property portfolios, typically located in or near Sydney's CBD, making them susceptible to the impact of higher interest rates on their investments, resulting in reduced disposable income.

In such a climate, the role of a professional property manager becomes paramount. With local insights and a deep understanding of market dynamics, experienced property managers can guide landlords in navigating these shifting tides. From adjusting pricing strategies to tailoring marketing approaches, the expertise of a skilled agent can make all the difference in optimising rental income and minimising vacancy periods.

Despite the challenges posed by strained affordability and shifting preferences, we see an opportunity in the ability to innovate by embracing a proactive mindset and leveraging the expertise and local experience of the right property manager.

We are confident in our ability to navigate evolving markets and ensure our clients' success in an ever-changing rental landscape.

We are for apartments.

If you are considering buying, selling, leasing or property management in Barangaroo, Sydney City, Millers Point, Circular Quay, Pyrmont or surrounds, we would love to help you. Ayre Real Estate specialises in apartment living and ready to help find your ideal property. Talk with us today to find out more.