Earlier this year, an international affordability report confirmed that Sydney’s housing market ranked as the second most expensive in the world for the second year running. If buying a house in Sydney feels like a pie-in-the-sky dream (we hear you), then renting may be your only option – but scoring an affordable rental property in the Harbour City can be just as challenging. Rental prices in Sydney are higher than those in any other city in Australia, but we’ve got good news. Today, Domain has released its June Quarter Rent Report in partnership with Pepper Money, with data showing a widespread slowdown in rental price rises. Intrigued? Read on.
Let’s start with the bad news. As a surcharge for our beautiful beaches and sun-soaked way of life, rent in the Harbour City remains stratospherically high compared with the rest of the country. The average rental price for a house in Sydney is $780 per week, compared with $580 in Melbourne and $620 in Canberra. Similarly, the average rent for a unit in Sydney is $740 per week, compared with $575 in Melbourne and $580 in Canberra.
Ready to buy? These are the most affordable suburbs in Sydney's Inner City for first-time buyers.
Last year, house rents in Sydney rose to a record high of $780 per week, and unit rents hit a record high of $740 per week (that's up from $720 in June 2024). While rent on houses rose by only 0.6 per cent (the weakest June quarter growth in four years), rent on units increased by 2.1 per cent over the quarter – with the cost-of-living crisis driving demand for smaller, more affordable homes over larger houses. Sydney’s vacancy rate in the June quarter hit a five-month high of 1.1 per cent.
Thankfully, the property experts at Domain and Pepper Money say rental growth across the city (and the country) has started to slow – a change they’ve described as “a welcome reprieve for millions of renters under pressure.”
According to the data in the June Quarter Rent Report, rental price rises in most major capitals across Australia are either stalling or seeing their slowest growth in years. This is the first time since 2019 that house rents across the combined capitals have remained stable for four consecutive quarters, which Domain and Pepper Money say signals “a clear turning point in the rental cycle.”
“Cost of living pressures have reached a tipping point. Renters are maxed out and landlords are being forced to hold steady. We’re also seeing a shift in demand – renters are downsizing or choosing units to stretch their budgets, which is why unit rents are now rising faster than houses,” explains Domain’s Chief of Research and Economics, Dr Nicola Powell.
So while Sydney rents are still sky-high, they’re starting to level out, and with rent rises in NSW now capped at one per year, we should start to breathe a little easier on the finance front. In the meantime, keep things affordable with our guides to Sydney’s best happy hours, cheap eats and budget-friendly activities.
Stay in the loop: sign up for our free Time Out Sydney newsletter for more news, travel inspo and activity ideas, straight to your inbox.