Knight Frank has released its first edition of the Prime Global Rental Index for 2022, with Sydney the only Australian city to rank in the top 10.

The harbour city sits at number five for nominal rents in local currency, with a growth of 7.2 percent. New York saw the strongest rise in prime rents in a 12 month period, with Hong Kong experiencing the largest decline. The average annual rise in prime rents is 11.9 percent, the highest rate since 2010.

Knight Frank Australia Head of Residential Research, Michelle Ciesielski, says rental prices have grown in Sydney due to a number of factors.

“Sydney has a relatively small number of prestige residential rental properties on a global scale, and they tend to be distributed across the city and around the harbour.

“When in town for business, regular international corporate travellers tend to lean more on hotel and short-stay accommodation. So when the global pandemic limited activity within close proximity of the CBD, Sydney’s overall prime rental market wasn’t as impacted compared to cities like New York and London.

“There were three groups driving up prestige rents including those taking advantage of phenomenal sale prices being achieved in their suburb, selling their home and using the low interest rate environment to invest further in their business ventures, returning expats and renovators.

“Prestige rentals in Sydney saw an uptick in demand from returning expats at the start of the pandemic, and at the same time, other expats were withdrawing their properties from the rental pool once arriving home.

“Throughout the pandemic and still experienced today, the range of properties to buy at the top of the market remains tightly held. Many have instead chosen to rent a home while they renovate their current home, or have purchased a property in a good location but one that requires extensive works to be done. Given construction delays experienced currently across the industry, many are now also holding onto their rental property much longer than they first envisaged.”

To view the Index, click here.

Architecture News & Editorial Desk

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