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Sydney saw prime rent prices grow by a massive 17.3 per cent last year – more than triple the growth rate in runner-up Auckland.
Knight Frank’s Prime Global Cities Index ranking for Q1 2024 saw Sydney take the lead over 15 global cities for rental growth in luxury properties. For the purposes of this report, that is generally defined as the top 5 per cent of the market by value.
Over the 12 months to the end of Q1, prime property rents in Sydney rose 17.3 per cent. The harbour city was followed by Auckland and London in second and third place respectively, each with a growth rate of 5.6 per cent.
In placing first, Sydney beat 15 global cities, including Berlin, Miami, Monaco, Los Angeles, Tokyo, Frankfurt, Geneva, Zurich, New York, Hong Kong, Toronto and Singapore.
Ben Burston, chief economist at Knight Frank, attributed Sydney’s extraordinary rental rise to strong internal migration trends.
“The sharp upward trajectory of prime rents in Sydney stands out in comparison to other global cities,” Burston said.
“While the economy is sluggish and disposable incomes are under pressure, the acute lack of availability continues to drive rents upward.”
High demand and low supply are themes across global markets, with 12 of 15 cities seeing an annual rise.
“In many markets evidence points to a rebalancing between supply and demand, but with tenant requirements still far outpacing stock availability, 80 per cent of the markets tracked by Knight Frank’s Prime Global Rental Index are still seeing positive annual rental growth, with Sydney leading the pack,” said Burston.
Nevertheless, a global slowdown is evidently underway, with 20 per cent of global cities showing a drop in rent prices, compared to Q3 2023 which saw increases in all 15 cities.
Liam Bailey, global head of research at Knight Frank, said: “We expect rental growth to resume its upward trajectory later in the year, driven by sustained demand in key global cities.”
“The rebalancing between supply and demand will be crucial in shaping the rental landscape moving forward,” Bailey concluded.
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