More than 100 people lined up to view a $800 per week apartment in Bondi over the weekend. (Source: Instagram/@brontelocal)
Footage of a huge queue of renters lining up to inspect a Bondi apartment has sparked heated debate online over the current state of the rental market. But a housing economist has argued the reality is far less dire than most people think. In fact, for most renting households, he says there is no crisis at all.
More than 100 renters were estimated to have lined up to view the $800 per week two-bedroom apartment on Saturday, with the queue stretching through the apartment complex and down the block, with the scene even likened to The Hunger Games.
While the viral video of the moment caused a stir online, Ben Phillips, associate professor at the Australian National University Centre for Social Research and Methods, told Yahoo Finance it was “not in any way” representative of rent problems in Australia right now.
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“I see these videos all the time and it’s almost always somewhere that’s a lovely place to live like Bondi,” Phillips said.
“All these areas of either Sydney or Melbourne that are highly desirable places for particularly young couples to move to. So it’s not really that surprising there’s a lot of interest.
“It’s usually high-income couples. It’s an extremely wealthy area, it’s not really the epicentre of rental problems or rental stress in Australia. Far from it, really.”
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The Bondi apartment has two-bedroom, one-bathroom and no car park. (Source: realestate.com.au)
Phillips said the reality was most rentals were located in the middle and outer suburbs of Australia’s capital cities, where renters may have lower incomes and were more likely to face financial stress paying their rent.
“I think if we were to start seeing enormous lineups and queues outside rental properties in Penrith or Mount Druitt, or outer suburbs of Brisbane or Melbourne, well, that’s when we’ve really got a problem,” he said.
“There are problems with the rental market, no doubt, but it’s got nothing to do with young, relatively high-income, likely dual-income families trying to move into Bronte because it’s a beautiful suburb.”
The apartment’s desirable location likely draw the big crowds, rather than it being representative of the typical rental market. (Source: realestate.com.au)
Maxwell Munro from Ellis Munro buyer’s agency uploaded the footage to the Bronte Local Instagram and estimated more than 100 people had lined up to inspect the apartment.
Munro agreed the video didn’t reflect demand nationally.
“I think Bondi, being Bondi, everyone wants to live by the beach, it’s a beautiful place. Lovely beaches, lovely lifestyle and, of course, it’s summer,” he told Yahoo Finance.
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“Yes with vacancy rates sitting at around 1.4 per cent, things are always going to have a lot of interest and particularly at that price point, $800 for a two-bedroom in Bondi is kind of unheard of.”
According to Cotality data, the median asking rent for Bondi Beach is currently between $1,000 and $1,100 per week.
“It’s dropped down from about $1,250. It peaked in June 2024, so about this time last year, it was up even more so [and] it is coming down,” Munro said.
“It’s also underpinned by the available stock. There’s just not much stock so that’s why there was a big line as well.”
Median weekly rental values across Sydney were just shy of $800 per week over the June quarter, up 0.8 per cent annually. Combined capital rents were sitting at $694 per week and nationally $663 per week.
Phillips pointed out that advertised rents only made up a small share of the total rental market, reflecting how hard and expensive it is to move rentals or rent for the first time. The vast majority of rental properties are currently tenanted and on pre-existing agreements.
The most comprehensive database on rents paid in Australia comes from the Australian Bureau of Statistics, which measures price changes for rents as part of the Consumer Price Index (CPI).
This captures around 600,000 rental properties or nearly one in three rental properties. By this measure, renters have increased by 19 per cent in just over five years, compared to advertised rents which have increased 49 per cent.
Videos of Huge lines of people queuing for rental inspections have become a more common sight. (Source: Instagram/@brontelocal)
While 19 per cent is a big increase, it is also two percentage points less than the overall increase in the CPI over the same period.
“[For] most people, the ABS statistics would suggest that rent increases have been less than the overall rate of inflation over the past five years,” Phillips explained.
“So in technical terms, real rents have gone backwards over the last five years, but there certainly has been a bit of a spike of late.
“But there’s also been some further assistance given by the government in terms of increased rent assistance payments to those on welfare payments. There’s about 1.3 million households on those payments.”
Phillips estimates that rental costs as a share of renters’ incomes have dropped from 28 per cent in 2013 to 26 per cent now.
While there’s no denying some people are struggling in the rental market, Phillips said the idea that we are in a crisis was “overblown” for most renters.
“That’s not that different to any other time in the last 5, 10, 20, 30 years. The overall market now in terms of what people are paying for rents is similar relative to their income as to what it was 5, 10, 20, 30 years ago,” he said.
“That’s not to say that there aren’t troubles with the rental market. Of course there is. Many people are struggling to pay the rent, but it doesn’t suggest to me that it’s a crisis compared to any other point in time in Australia’s history.”
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