Is it time to invest?

Continuing from last week’s theme of the customary relationship between rents and interest rates, the yearly suburb rent stats have just been released by CoreLogic.

So what do they reveal?

We know that houses and units perform differently in the market, both in sales and leasing, but the supply / demand ratio is most influential factor in both. A shortage of dwellings available for lease as well as for sale has maintained an upward pressure on rents and sale prices.

In terms of rental properties, higher interest rates have impacted negatively on supply as investors have chosen to reassess their investment options. This is at the same time that we have received record levels of overseas migrants who tend to gravitate towards inner-city units.

The latest data shows that of the markets analysed, almost two thirds of unit suburbs recorded an annual rent increase of 10% or more, as did more than one third of house markets. However, the strong sales results in the March to June period may encourage investors to invest in housing with the prospect of strong capital gain.

It is no surprise that Sydney has dominated rental value growth across both houses and units. Of the top 20 suburbs analysed, 16 were in the Sydney area for houses while for units, all bar one were Sydney suburbs. (See tables below).

National top 20 rent increases - Houses 

Suburb	GCC or region	Y-o-Y change in rents	Median weekly rental value
Campsie	Sydney	29.3%	$802
Belfield	Sydney	28.3%	$815
Little Bay	Sydney	27.8%	$1450
Randwick	Sydney	24.1%	$1594
Baynton (WA)	Rest of WA	24.1%	$1257
Mascot	Sydney	23.9%	$1141
Maroubra	Sydney	23.9%	$1417
South Coogee	Sydney	23.8%	$1759
Kensington (NSW)	Sydney	23.4%	$1412
Canterbury (NSW)	Sydney	23.1%	$834
Belmore	Sydney	22.8%	$805
Coogee (NSW)	Sydney	22.7%	$1806
Millars Well	Rest of WA	22.5%	$1008
Bondi	Sydney	22.4%	$1840
Pegs Creek	Rest of WA	21.9%	$924
Roselands	Sydney	21.9%	$795
Kogarah Bay	Sydney	21.7%	$926
Rosebery (NSW)	Sydney	21.7%	$1206
Arncliffe	Sydney	21.4%	$873
Bulgarra	Rest of WA	21.4%	$888

National top 20 rent increases - Units 

Suburb	GCC or region	Y-o-Y change in rents	Median weekly rental value
Haymarket	Sydney	32.6%	$1122
Georges Hall	Sydney	31.3%	$709
Arncliffe	Sydney	30.9%	$781
Wolli Creek	Sydney	30.6%	$836
Kingsford (NSW)	Sydney	30.3%	$765
Burwood (NSW)	Sydney	29.2%	$752
Kingsgrove	Sydney	28.4%	$665
Eastlakes	Sydney	28.3%	$630
Zetland	Sydney	28.2%	$988
Turrella	Sydney	28.1%	$817
Sydney	Sydney	27.7%	$1050
Hurstville	Sydney	27.6%	$680
Allawah	Sydney	27.6%	$621
Homebush West	Sydney	27.3%	$634
Strathfield (NSW)	Sydney	27.0%	$690
Lakemba	Sydney	26.9%	$480
Chippendale	Sydney	26.8%	$858
Rockdale	Sydney	26.8%	$655
Rosebery (NSW)	Sydney	26.6%	$943
Travancore	Melbourne	26.4%	$509

* Source: CoreLogic. FY 2022-23. Note suburbs were only analysed where there was a minimum 20 sales in the year, 20 rental listings, and high confidence in the median home value of the suburb. 

When it comes to houses, the Inner South West of Sydney typically records one of the highest net overseas migration figures across the country, alongside Parramatta and the City and Inner South of Sydney. While for units, each of the top performing unit rental markets are very well serviced by transport, are close to the CBD and are high amenity areas. This likely makes them in high demand with both international and interstate migrants, and young professionals.