The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1387 EXPERT LANDLORDS TALK ABOUT RENTAL SPREAD... WHAT IS IT?
Ever wondered what happens to rent prices when a tenant moves out and a new one moves in? The answer lies in what industry insiders call "rental spread" - a critical metric that reveals the true state of our rental market.
We're pulling back the curtain on this hidden data across Sydney's Northern Beaches, and the numbers are staggering. Properties that were leased at $630 per week are now commanding $750. Houses previously at $1,900 are jumping to $2,100. And the most shocking part? These properties are being snapped up within days - sometimes just 24 hours after becoming available.
This represents the largest rental increases witnessed in over three decades of real estate experience. While mainstream media reports suggest a cooling rental market, the reality on the ground tells a dramatically different story. With only 365 properties available for rent across the entire Northern Beaches region, and major agencies reporting historically low inventory (just 9 properties available from a portfolio of 2,000), the supply-demand imbalance continues to drive prices upward.
We explore the challenges facing both tenants and the broader market, including the effectiveness of government density initiatives and the ongoing disincentivization of property investors. For struggling tenants, we offer practical advice about improving rental applications to stand out in this fiercely competitive environment. The data we're sharing simply isn't available anywhere else, providing a rare glimpse into the true dynamics of Sydney's rental crisis.
Whether you're a tenant feeling the pinch, a landlord managing investments, or simply interested in property market trends, this frank discussion about rental spread delivers invaluable insights into one of the most pressing housing challenges of our time. Listen now to understand what's really happening beneath the surface of Sydney's rental market.
Guys, there is a technical term for what rent was and what it then becomes when it gets re-let. We call this rental spread. We're talking about all things rental spread in the rental market in Sydney right now. Stay tuned, I'm the ringleader, so let's go, hello.
Speaker 2:Hello.
Speaker 1:Hello.
Speaker 2:Real estate agent, expert landlord Talking about rental spread.
Speaker 1:Yeah, my Our media team was very Real estate agent, expert, landlord talking about rental spread. Yeah, our media team was very uncomfortable when we invented these social media posts, these tiles, and they were like, oh look, you know, don't really know if we want to put that out there in the market and what it was was putting out there how long it took to rent, what it was rented for and what it got rented for in the end. You actually can't find that data anywhere in the country.
Speaker 2:It's transparency and it's pretty insightful to marketplace, who obviously you know curious people. A lot of people know rents have have increased in the last 12, 24 months but, as you said, how much, um, we're going to tell you this morning across the last uh, three weeks activity, two weeks activity in our rentals thing and give you an insight. So what's happening on the northern beaches, let's get straight into it. Boom. So these tiles put together every result the team does. Top right hand corner. You can see the time, the old rent and the new rent and the difference between the old rent and the new rent is rental spread. How much on that? One? 560 to 595 for a one bedroom in Wayne street, freshwater 30 bucks, 30 bucks. Chroma. This was a house 1950, nearly 2100. That's a big jump. Yeah, um, what looks like a? Um, what looks like a little stable? Yeah, here actually it's a one bedroom studio um, 350 to 400 per week, 50 bucks. This is a build to rent model, can I say so there's 20 odd units 40 ounce.
Speaker 2:Yeah, 20 odd units in here, yep, and they're like studio furnished accommodation 480 to 500 a week. However, these are turning over quite quickly Every three to six months. 30 bucks. Hundred a week. However, these are turning over quite quickly every three months. Two-bedroom color I eight hundred to eight fifty a week. It would erode near the beach. It's fucked I. Lambi heights 21 C, kurt more road this is a granny flat by 750 or 780 a week. Look at at the timeframes. These are all being leased in a week Yep $30. One week, one week. One week. Two at 15 Lismore Avenue. Two bedroom $630 to $750. Wow, big jump $120. Looks like a good two bedroom. 16 at 21 redmond road, vacant for one day. So the vacancy in between tenants moving out and tenants moving in one day saves the landlord at this price, 100 a week. That's awesome, incredible.
Speaker 2:It's a buoyant rental market. Yeah, yeah, and leased in one day. House in Cromer, $1,900 to $2,100 a week, wow, $200. What's this? One House? Dy townhouse, rather, $1,250 to $1,350 a week, $100. Leased in three days $100. And Paddington we do do out of area. That's the rental spread, whoa.
Speaker 1:So the distance from what it was rented for to what it got rented for, that's called rental spread and it's actually impossible data to find out in the market. It's only reported internally in agencies what it was getting to. You can't use bond lodgements from previous to new or any of that stuff because that doesn't account for rental increases through that period. So the rental spread very, very interesting. Um, these are the largest rental spreads I've ever witnessed in 32 years of real estate. I've never seen rents increase at this flow, at this rate. Um. Furthermore, um, the media is actually reporting the opposite. The radio meant the media is saying that the rental markets cooled off. Definitely not what we're seeing on the northern beaches of Sydney yeah, 365 properties for rent on the Northern beaches, realestatecom.
Speaker 1:Yeah, wow To that out of a. Out of a. What is the future of rentals in the next 12 months? Billy?
Speaker 2:for tenants, for landlords? Sure answer is I'm actually not sure, but here's another statistic for you Out of a portfolio of 2,000 properties we're responsible for looking after locally, there's nine of them for rent currently on our books, and we're one of the largest independent agencies.
Speaker 1:We're one of the largest independent rental agencies in Sydney. In Northern Beaches we're the biggest by a long shot and we've got nine for rent only. Only We've had times where we've had 60, 65 for rent, to give you a reference of sort of. You know what a big number is, but that's an astonishing low amount of rent. Very hard for tenants to find a property and I think my message out there to government I think that Minister Minns has done a great job with bringing in the density. The MINS has done a great job with bringing in the density, further density across 170 town centres across New South Wales.
Speaker 1:But I think everyone's finding that the hard thing is going to be the execution and actually developing that stock and finding builders. Given the cost of what you know, building is so expensive, um, and funding as well. So I don't know if that's going to pipeline through to more rental properties on the market. It certainly does not feel like it at the moment. So and then with you, look, when you look at all of the legislation and how de-incentivized landlords have been in the last 20 years, there's having one incentive put on the table for a landlord. It's really I call it killing the farmer. You know, if you, if there's, we need farmers to put food out for people to eat. We need landlords to put rental properties out there for tenants to rent and I think we've been. We have been doing a good job with supporting landlords in government.
Speaker 2:So I think the silver lining for tenants here is I've had two friends in the last two months reach out and just ask for advice on how to apply for rental properties and both have been successful. They took sort of changes to the way they put their application in, what documents they put in, how they presented their application and then found success on the back of that, which was really nice to see. So I do think as a tenant you can't be sloppy with that process. There's competition out there and you need to get a good cut through on your applications to give you the best chance of securing a property. And that doesn't cost anything. To just pick up the phone, call an agent you know or you might know, or a friend knows and you know you trust, just ask the question of what can I do differently? We really want to help billy finish.
Speaker 1:So finishing off, in conclusion, what is rental spread?
Speaker 2:the difference between the old and new rent, top and bottom there you go, have a great day.
Speaker 1:See you later. Thanks everyone, hope you help you. The rental information today.