Sydney and Melbourne rents have dived the most on record, according to Domain, as both cities go through a 'once in a lifetime' moment

Melbourne’s inner city has emptied out during lockdown. (Diego Fedele, SOPA Images, LightRocket via Getty Images)
  • Melbourne and Sydney apartment rents have fallen by 4.8% during the pandemic, according to Domain’s records.
  • Senior analyst Nicola Powell said it marks the deepest fall on the company’s records, which run all the way back to 2004.
  • Sydney tenants in the city and eastern suburbs are saving $125 and $85 respectively per week.
  • Visit Business Insider Australia’s homepage for more stories.

The Australian rental market has is running at very different speeds, depending on where you call home.

The latest data from Domain shows that asking rents on apartments in Sydney and Melbourne continue to slump, providing either sweet relief or a growing headache depending on whether you’re a tenant or investor.

“Fragmented conditions in the rental market remain evident in the September quarter, with weaker unit rents compared to houses,” Domain senior analyst Nicola Powell said.

“This is particularly so in inner-city areas which are more susceptible to changes in overseas migration and international students, tourism and job losses associated with COVID-19.”

Sydney and Melbourne’s units fall hardest

While Melbourne remains in strict lockdown, Sydney has managed to match its falls in lockstep, with the two dropping 4.8% since March — “the deepest fall over two consecutive quarters” since Domain’s records began in 2004.

Federation Square in Melbourne is quiet and empty during the Coronavirus pandemic (Chris Putnam, Barcroft Media via Getty Images)

In the more expensive harbour city, it amounts to a $25 a week reduction since March. With the median apartment asking less than $500, tenants haven’t had it this good since 2014.

“Since March, house and unit asking rents in the city and east region have had the largest decline in Sydney – by $125 and $80 a week, respectively,” Powell said, noting it had returned rents to 2013 levels.

“This is followed by a $70 a week reduction to unit asking rents in the lower north shore.”

Apartment rents have plummeted in Australia’s biggest two cities. (Domain)

In Melbourne, it’s a similar story, with the median apartment asking a flat $400. Unsurprisingly, it’s been Victoria’s lastest lockdown that appears to have sent the property market into a tizzy.

Rents fell a straight 3.6% in just three months, as the pandemic had, what Powell called, “a once in a lifetime impact on the rental market”.

“In a matter of months Melbourne has become a tenants’ market, with the number of vacant rental properties more than doubling since March, though this is magnified in inner-city areas,” she said.

By the same token, it is Melbourne’s units that have taken the biggest hit, drawing levels with Hobart’s for the first time.

“The decline in Melbourne unit rents has been the greatest of all the capital cities, accelerated by the stricter stage-four lockdown. Unit asking rents dropped another $15 a week over the September quarter. Tenants will find asking rents are $30 a week lower than the March peak, before the pandemic,” Powell said.

Houses for rent have held up better. (Domain)

Government support policies had helped prevent even greater falls, Powell said.

Outside of its inner-city, however, the market had actually remain relatively stable or even risen in the city’s south-east and the nearby Mornington Peninsula.

The rest of Australia is actually getting more expensive

It marks a serious contrast with the remainder of the country.

Brisbane and Adelaide both hit record high rents for both houses and apartments, while even Perth and Darwin appear to be turning around after years in the doldrums.

Meanwhile, Canberra rents recovered what they had previously lost, to retain its unenviable title of being Australia’s most and second most expensive city, to rent a house or apartment respectively.

Finally, Hobart has recovered a little ground, as rents begin to stabilise due in part to it having the lowest vacancy rate in the country.

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