Sydney’s Prime Residential Rents Soar to Third Place Globally: Knight Frank Index

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In a recent report by Knight Frank, Sydney has surged from sixth to third place in the Prime Global Rental Index for the first quarter of 2023, surpassing luxury residential rental markets worldwide.

The index tracks the movement of high-end residential rents in ten cities globally and found that Sydney’s prime property rents experienced a remarkable 11.7% annual growth and 5.3% growth in the year’s first quarter.

Sydney ranked third in annual growth, outshining other cities, trailing only behind Singapore and London. Moreover, it recorded the second-highest quarterly growth for Q1 2023, previously at the fourth position, with Singapore leading the pack in the past twelve months.

According to Erin van Tuil, Knight Frank’s Head of Residential, the surge in demand for affordable and luxury residential properties, coupled with chronic undersupply, is the driving force behind the remarkable rent growth. 

“We are seeing this imbalance between demand and supply in both affordable and luxury residential markets, with very low vacancy rates, hence why Sydney prime residential rents have experienced strong growth over the past 12 months,” she said.

The post-pandemic recovery has been robust, with prime rents in Sydney exceeding pre-pandemic levels (Q3 2019) by 14% and rising by 21.7% from the pandemic low in Q1 2021.

Michelle Ciesielski, the head of residential research at Knight Frank, said that although growth rates have decelerated compared to the previous quarter’s 10.2%, rents are still increasing rapidly globally.

“This is continuing the trend that started in 2021 as cities recovered from the pandemic, and we saw a surge in global and domestic prime rental demand as workers moved back to cities as economies reopened,” Ciesielski added.

While growth rates have moderated from the previous quarter, the global trend continues, with rents rising rapidly in most cities, indicating a solid rebound in economies and rental demand post-pandemic. 

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