Sydney's east rental market: $750 per week vs $25,000 per week

Adam Shagrin, CEO and co-founder of RENTTA, works across Sydney's eastern suburbs rental market with clients from apartments at around $750 a week to harbourfront homes at $25,000. His experience this year is that rents are climbing and good stock is harder to find than he has seen it.

The data supports the first half of that. Sydney asking rents are up 5.2% over the past year, according to SQM Research. Domain recorded the largest quarterly rise in Sydney house rents in four years in the June quarter, taking the median to $850 a week. At the top of the market the move has been sharper: Vaucluse is now Australia's most expensive suburb to rent a house, with a median asking rent of $3,300 a week, up 20% in a year.

Supply is a more local story. Across Sydney, vacancies have risen. SQM counted 26% more vacant rentals in August than a year earlier, and Cotality puts the city's vacancy rate at 2.2%, the highest of the mainland capitals. The east is running against that trend, and it isn't uniform either. Clovelly house rents fell 9.1% in the June quarter while most of the region rose.

How that plays out depends on which end of the market you're in.

At $750 a week: volume and speed

$750 is close to Sydney's median unit rent of $755. In Bondi, Randwick or Coogee it buys less than it does across most of the city, and competition for it is heavier.

This end of the market runs on volume. Plenty of applicants per property, decisions made within days, and tenants who are already close to their affordability limit. That limit is the main brake on further growth. Cotality has warned that record rental unaffordability may stop rents rising much further from here.

Supply is likely to get tighter. From budget night on 12 May, investors buying established property can no longer negatively gear against their salary, and the capital gains discount has been cut back. Treasury expects around 35,000 fewer rental properties nationally as investors shift to new builds and first home buyers take up established stock. Older apartments in the east are exactly the stock those buyers target.

What tenants can take from it

Have your application complete before the first inspection: ID, payslips, rental references. At this price point the first strong applicant is often the one approved.

NSW agents can no longer invite rent bidding. You can still offer above the advertised rent, but decide your ceiling before you inspect, not while standing in the kitchen with ten other people.

Rent can only rise once every 12 months in NSW. A longer fixed-term lease gives you more certainty in a rising market, so check what the lease says about increases before you sign.

What landlords can take from it

Price to the market. A $20 premium on a $750 rent takes 37 weeks to recover a single week of vacancy.

Since 19 May 2025, NSW landlords need a valid reason to end a tenancy. The tenant you choose is likely the one you keep, so choose on reliability over the highest offer.

The same reforms restricted when landlords can refuse pets. Accepting them from the start widens your pool of applicants at no extra cost.

At $25,000 a week: few homes, fewer tenants

The top end works on different mechanics. There are a small number of homes on the harbour at this level and a small number of people able to pay for them.

Those tenants tend to have a reason to rent rather than buy. Families returning from overseas for two or three years, families renovating or building, executives on relocation packages, owners who have sold and not yet bought. One prestige agent told Domain that around 30% of top-end tenants are returnees.

Every lease is negotiated individually. Price, term, start date, furniture, pool and garden maintenance and security arrangements are all part of the deal, and many of these homes are leased through agent relationships before they reach the portals.

What tenants can take from it

The rent is negotiable in a way it isn't at $750. Flexibility on start date or a longer term is often worth more to an owner than a small increase in rent.

Get every inclusion in writing. At this level, who pays for the pool, the garden and the alarm monitoring can be worth thousands a month.

Ask agents what is coming up before it is advertised. The best homes at this level often never appear online.

What landlords can take from it

Every week vacant at $25,000 is $25,000 lost. Asking $2,000 a week above the market and sitting empty for three weeks costs $75,000, which the higher rent takes 37 weeks to recover. The arithmetic is the same at both ends of the market. At the top end the dollars are larger and the pool of tenants is smaller, so a mispriced home sits longer.

Match the home to the tenant's timeline. A family renovating needs a firm 12 or 18 months. A relocating executive may need a furnished home from a set date. Owners who can accommodate either lease faster.

Sellers who are leasing instead

The sales market has softened. Sydney values fell 4.7% over the past three months and are 7.1% below February's peak, while rents have kept rising. Some eastern suburbs owners who planned to sell this spring are leasing their home instead and waiting for a stronger sale market.

The rent will rarely match what the same capital could earn elsewhere. Values in the east are high enough that gross yields sit below the Sydney average of 3.3%. The case for leasing is that a rising rent covers the holding costs while the owner avoids selling into a market where buyers are cautious and prices are still adjusting.

Before you lease a home you plan to sell

Speak to your accountant first. If you move out and lease your home, the ATO's absence rule can let you keep treating it as your main residence for capital gains purposes for up to six years. The negative gearing changes from budget night apply to property bought after 12 May 2026. How either applies depends on your circumstances.

Match the lease to your sale plans. Selling with vacant possession is a valid reason to end a tenancy in NSW, but notice periods apply and the property can't be re-let for six months afterwards. A 12-month lease signed now puts your sale into next spring.

You can also sell with a tenant in place. That suits investor buyers, but an owner-occupier who wants to move in has to wait for the lease to end, which can shrink the pool of buyers for a family home.

Owners weighing this up can speak with the property management team at Cohen Farquharson about pricing the lease, finding the right tenant and managing the home until they're ready to sell.