Sydney rents soar far beyond $2 weekly predicted rise after tax reforms

By the Editorial Team · Saturday, October 31, 2026

Rents in Sydney and New South Wales have increased sharply in recent months, with median weekly rents reaching around $800 and some areas experiencing rises up to $250 per week, exceeding government forecasts. This surge heightens housing affordability challenges and experts warn that without a substantial growth in housing supply, rental pressures are likely to continue for several years.

Rents across Sydney and broader New South Wales have risen significantly in recent months, surpassing earlier government projections and intensifying concerns about housing affordability. Data from the past quarter reveals that many suburbs are experiencing rental increases far greater than the federal Treasury’s May budget estimate, which forecast an average rise of just $2 per week.

Exclusive figures indicate that median rents in Sydney now stand at approximately $800 per week, with some areas seeing weekly increases of up to $200. Apartment rents grew by more than $2 weekly in about 60 percent of Greater Sydney suburbs, while house rents rose by over $2 in 55 percent of locales, frequently climbing by $20 or more per week. For example, median house rents in Ourimbah on the Central Coast increased by nearly 6 percent in three months, adding $40 to weekly costs. Barangaroo registered one of the largest hikes, with house rents rising $250 and unit rents up by $100 per week.

Renters directly affected by these changes have attributed part of the increase to recent tax reforms. Nicole Schmidt, a single mother living in Ourimbah, faced a 20 percent rent rise earlier this year, which she linked to the government’s alterations to negative gearing and capital gains taxation. She argued these reforms have exacerbated rental pressures, making it difficult for families to remain in their communities.

However, some landlords cite other factors. Ben Hartley, a landlord and tenant in Coogee, described a recent rent increase on his apartment of $110 per week, which his landlord attributed to interest rate rises. As a property owner himself, Hartley expressed skepticism about using interest rates as the sole explanation for rising rents.

Experts suggest a combination of factors is driving the current rental market. Senior economic analyst Megan Lieu noted that although rental supply has somewhat moderated price growth, rents are unlikely to ease without a significant increase in housing stock. Tim Reardon, chief economist for the Housing Industry Association, emphasized that the full effects of recent tax changes on the rental market are not expected until around 2028. He highlighted that a prolonged shortage of investment in new housing construction over the past decade remains a fundamental issue.

Government representatives have acknowledged the strain rising rents place on renters but attribute the problem primarily to a lack of housing supply rather than tax policy. A spokesperson for Housing Minister Clare O’Neil pointed to record levels of home construction underway across Australia, emphasizing efforts to increase housing availability. Meanwhile, Treasurer Jim Chalmers defended the tax reforms as necessary economic adjustments, criticizing previous governments for avoiding difficult reforms.

Despite these reassurances, the gap between rising rental costs and affordability continues to widen for many tenants, with industry analysts warning that without increased construction or changes to investment incentives, upward pressure on rents may persist in the coming years. Treasury officials were contacted for comment but did not respond.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.