On a regular basis I always find value, even some inspiration in looking at the general trends that lay behind the detailed statistics published by the NSW Rental Bond Board.
In this post, there’s some interesting figures comparing calendar years 2018 and 2019. One key reason is that 2019 did see a big increase in supply, around which there was some debate, focused on the markets ability to absorb this new stock.
Investors are an important part of the housing market and the demand for investment properties has seen some big fluctuations over the past 12-18 months and this gives the Bond Board’s figures added value. And I think points to the continued appeal of residential property investments.
While the board’s figures cover all of NSW, they still give a valuable overview of demand and a general indicator of rental trends.
Total Number of Bonds
To start this summary the total number of bonds lodged in each year 2018 and 2019 gives us a solid indication of the size of the private rental market. The figures for the two years are:
• For 2018 – 331,880 bonds
• For 2019 – 348,925 bonds
We can see that over the 12-months there were an additional 17,045 private bonds paid. However, despite the increase in numbers the combined average of all rentals paid remained remarkably stable.
In 2018 the average figures across all location and properties was $505/ week and in 2019 that had increased to $524/ week. As this figure is an average across all locations and property types, it’s of limited value but does still indicate the wider markets ability to absorb an increased level of supply.
The Most Popular Rental Suburbs
It’s also interesting to look at a brief comparison of where the most bonds were lodged in 2019 by comparison to 2018, as this is a solid indication of where most supply is currently available and also where the demand for rental accommodation is its strongest.
The Top Ten Locations for 2018:
1. 2000 Sydney City
2. 2017 Waterloo/Zeatland
3. 2026 Bondi/Bondi Beach
4. 2010 Darlinghurst/Surry Hills
5. 2170 Liverpool
6. 2150 Parramatta
7. 2008 Chippendale
8. 2011 Rushcutters Bay/ Kings Cross
9. 2145 Westmead
10. 2065 St Leonards/ Crows Nest
The spread of locations is not surprising covering the eastern suburbs, the inner west, south west and west. It’s also noteable that there’s also a spread across the major and diverse centres including Sydney, Liverpool and Parramatta.
Sydney’s east is always popular, while more recently a higher concentration of new high density developments in areas such as Waterloo/Zetland, Chippendale (Broadway) and St Leonards/Crows next are popular.
The Top Ten Locations in 2019:
1. 2026 Bondi/Bondi Beach
2. 2170 Liverpool
3. 2145 Westmead
4. 2017 Waterloo/ Zeatland
5. 2250 Gosford/ Central Coast
6. 2148 Blacktown
7. 2065 St Leonards/ Crows Nest
8. 2500 Wollongong
9. 2444 Port Macquarie
10. 2560 Campbelltown
One of the most notable variations in the details for 2019 is the spread into regional areas including Gosford/Central Coast, Wollongong and Port Macquarie. This may be an indication of tenants and investors looking for more affordable properties and rentals, while Port Macquarie may be attracting pre-retirement and retirement tenants.
The Composition of Supply
Another key insight into the rental market and hence a pointer to the most popular type of investment property, is a comparison of supply. Which for this exercise I have only included 1, 2 and 3-bedroom properties and from the Board’s figures that includes both houses and apartments.
Supply of Rentals Properties:
This comparison is defined by the number of bedrooms as tracked in figures published by the Board.
Number of Bedrooms Leased 2019:
• 1-bedroom – 62,931
• 2-bedrooms – 125,251
• 3-bedrooms – 78,579
Number of Bedrooms Leased 2018:
• 1-bedroom – 56,998
• 2-bedrooms – 115,411
• 3-bedrooms – 84,929
The number of 1 and 2-bedroom properties lease both increased with 2-bedroom properties the most popular. One reason for a drop in 3-bedroom bonds could partly be explained by the greater stability from tenants in these homes. Families and even group houses tending to be more stable and longer term.
Since 2016 it’s estimated from the Board’s published figures, that some 43,814 additional private tenancies became available across NSW and this in part clearly shows the importance of the residential investment market in meeting the demand for housing.