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An Update for Residential Property Investors and Managers

News article_Residential_rent_1536x1040

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 notable 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/ Zetland
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 rent
al 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.


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Peter Chittenden

Managing Director | Residential

Residential

Sydney CBD

My professional knowhow stems from an extensive career in Residential property development, project marketing, site acquisition and property valuation.

I rejoined Colliers International 11 years ago as Managing Director, and since then I have worked to grow my team and our Residential division by more than 300%.

Across the country we have successfully launched and sold over 100 Residential projects, and we have played an instrumental role in every aspect of these successes for our clients.

I have built a team that offers the complete end to end service for our clients and customers alike, from the site aquisition right through to the sale and settlement of every last apartment. 

My 30+ years of experience in real estate, and genuine passion for property has seen me involved across numerous key industry bodies and groups, as well as the establishment of my own thought leading blog, projectagenda.com.au with over 4000 followers from within the industry. 

Prior to my time at Colliers International, I held the position of National Sales and Marketing Manager for Stockland Apartments. During his time I launched and managed a national portfolio of major projects and led a large national sales and marketing team. Prior to this, I started and ran my own successful project marketing company, Realm Project Marketing, for three years specialising in large land estates, housing and apartment projects predominantly in NSW, providing a high level of service that extended beyond the traditional sales appointment.

In my earlier role at Colliers International I was the National Director, Residential Land Marketing, where I established a highly successful division which led to the appointment of our business to project market several major estates in Sydney and Melbourne, which commenced long lasting relationships that our business still maintains today. 

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