In NSW 34% of households live in rented accommodation, nationally the figure is slightly less at 32% up from 27% in 1997/98.

The NSW Rental Bond Board affords high visibility of rental trends and that includes a detailed breakdown of suburbs and regions where the majority of rental accommodation is located. This helps give us some interesting insights into how popular areas are and some of the factors driving demand.

These are helpful indicators for investors and also developers as they directly relate to demand and reflect the impact of rents and supply. The trends are also of interest in today’s market with the prevalence of higher vacancy levels, and in some markets falling rents.

Between 2019 and 2020 detailed figures published by the NSW Rental Bond Board reveals the most popular suburbs and also those that have the most fluid tenant demand. Measured by refunds and new bonds across tens of thousands of individual residential lease transactions.

Moving Out

To help examine how fluid the NSW rental market is I’ll consider where tenants were moving to and where tenants were moving from and do so comparing the first 6-months of 2019 and 2020.

The suburbs with the highest number of vacating tenants (as measured by bond refunds) in 2019 were the City of Sydney, Liverpool, Bondi (Junction, Beach and North) and Chippendale. The results were remarkably concentrated.

In 2020 covering the first 6-months the highest number of vacating tenants on the basis were the City of Sydney, Waterloo, Chippendale and Darlinghurst. Again, these results were concentrated.

However, there was one notable result and that was the very high number of tenants who vacated the City of Sydney between April-June when number peaked at 2549. That result was well above the same period in 2019 when 1023 tenants vacated the city.

Waterloo and Darlinghurst were other suburbs where there was a noticeable jump in the numbers of tenants vacating their rental accommodation. In contrast Liverpool, Parramatta and Westmead were much more stable. One   factor for this variation may be the lack of university students in areas like the City, Waterloo and Darlinghurst.

While concentrating on the top ten most vacated markets, the only regional centres included were located around Wagga Wagga and Wollongong. However, it was Wollongong that had the most varied activity, peaking as the fourth most active area in the first quarter of 2020.

Moving In

Flipping the figures to consider the number of tenants ‘moving in’ to new accommodation the most popular suburbs were again heavily concentrated in the City of Sydney and Waterloo but also in Liverpool.

The Liverpool region was a leading destination for new bonds and hence tenants in both March 2019 and April 2020 when it eclipsed the City, and Liverpool has remained in the top three locations for much of 2019 and 2020 and may well be seen as indicating a hunt for value among tenants.

Demand in Parramatta and Westmead remained in lockstep and Wollongong was the only regional centre to rate in the top ten centres, although by July 2020 had dropped out of the top ten.

The City, inner-west and Parramatta region dominate rental demand and are also areas where big numbers of new apartments have been completed over the past few years. Although Sydney Olympic Park also entered the top ten rental locations early in 2020. Chippendale almost fell from the top ten in July 2020 as Surry Hills became a more popular destination.

Chippendale’s popularity with students again being one main influence and COVID-19 has greatly reduced numbers, while Surry Hills offers a greater diversity of rental accommodation with less concentration in high-rise buildings and access also improved with the completion of the light-rail running through the suburb.

One final point is that the most popular rental suburbs are very diverse and range across the City including areas like Elizabeth and Rushcutters Bay, extending to more west and south-west suburbs like Liverpool and Blacktown.