The pressure on Newcastle's red-hot rental market shows signs of easing slightly as prices level off.
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New figures from property analysts CoreLogic show the median weekly rent in Newcastle and Lake Macquarie rose 0.5 per cent in the December quarter, one of the smallest increases in NSW.
Rents jumped 6.6 per cent in the calendar year, but most of that increase occurred before residential property sales started cooling off in the final months of 2022.
The Newcastle rental vacancy rate increased from just 1 per cent in December 2021 to 1.4 per cent in the December 2022 quarter.
In the rest of the Hunter, rent prices rose 1.1 per cent in the December quarter and 7.4 per cent in the year and the vacancy rate rose from an exceptionally tight 0.8 per cent to 1 per cent.
Everyone talks about how difficult the Sydney rental market is, and I've had relative ease with that, so I was surprised in Newcastle.
- Lucinda Garbutt-Young
Renter Lucinda Garbutt-Young, a 22-year-old moving from Sydney to Newcastle for work, found a rental property in Lambton after six weeks of searching but only after offering $30 more than the advertised weekly rent.
Ms Garbutt-Young and her two housemates secured the house in Drysdale Drive for $600 after applying for about 20 properties.
"It was definitely above asking price, which seems to be fairly consistent with what other people have said they're doing," she said.
"We did offer more when we realised other people who applied had as well.
"We did that across most properties we applied for and wrote a follow-up letter with a bit more about our financial and work situation and any additional money we were willing to pay.
"I think that's the only way we got a place."
In dollar terms, CoreLogic's analysis found median rent rose $38 in Newcastle in 2022, from $570 to $608, and also $38 in the rest of the Hunter, from $510 to $548.
A separate report by PropTrack shows Newcastle advertised rents fell 3.6 per cent in the December quarter to a median of $530, though these numbers do not take into account renters offering more to secure a property.
PropTrack report author Cameron Kusher said the fall in Newcastle's median rent was "surprising" given the "very low" vacancy rate.
"People are looking for more affordable options to reduce their expenditure," he said.
"One factor is people could be shifting from houses to units, which is a trend we're seeing across the country.
"And maybe not as many people are moving to Newcastle from Sydney as we saw during the pandemic."
Ms Garbutt-Young said the "more concentrated" Newcastle market was tougher for renters than in Sydney.
"I think in Sydney, if people don't get a place in the immediate area they're looking, then they move somewhere else and it becomes a bit easier," she said.
"In Newcastle, because it's smaller, there's not that opportunity in the same way.
"I think it is trickier to get a place in Newy.
"Everyone talks about how difficult the Sydney rental market is, and I've had relative ease with that, so I was surprised in Newcastle."
Ms Garbutt-Young said she had "definitely" wanted to live closer to the inner-city.
"It's OK. I'm just glad we've got a place."
CoreLogic's finding of a 0.5 per cent quarterly rise in Newcastle's median rent compares with a 2.8 per cent increase in Greater Sydney and 1.3 per cent in Illawarra.
Rental yields, the gross annual income from rents as a proportion of purchase prices, jumped from 3.3 to 3.8 per cent in Newcastle and 3.8 to 4.1 per cent in the rest of the Hunter in 2022.
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