Rents Are Rising While Values Ease: What It Means for Northern Beaches Landlords

Across Sydney, rents are still rising while property values fall. Cotality's figures released on 1 October 2026 show Sydney house rents up 4.9 per cent over the year and unit rents up 3.7 per cent, while Sydney values fell 7.0 per cent. For landlords that means slightly better yields, but also higher holding costs and renters with less room in their budgets, so pricing the rent correctly and keeping good tenants matter more than usual.

What the Numbers Say

These are Sydney-wide figures. Cotality does not publish a separate Northern Beaches rent index, and individual suburbs and property types can differ.

• Rents. Sydney house rents rose 4.9 per cent and unit rents 3.7 per cent over the year to September 2026.
• Yields. Sydney's gross rental yield was 3.4 per cent: 3.0 per cent for houses and 4.4 per cent for units.
• Values. Sydney dwelling values were down 7.0 per cent over the year.
• Vacancy. SQM Research put Sydney's vacancy rate at 1.7 per cent in August 2026, with available rental stock up about 26 per cent on a year earlier.

Cotality's research director Tim Lawless said rental growth has stretched affordability "to the worst levels on record", and that renters are likely to be looking for ways to cut their rental costs, such as sharing with more people or choosing smaller homes.

Holding Costs Are Higher

The Reserve Bank lifted the cash rate to 4.60 per cent on Tuesday 29 September 2026, its fourth increase this year. For many investors with a mortgage, that has pushed repayments up faster than rent. Cotality noted that even as yields improve, neutral or positive cash flow remains hard to achieve once interest, insurance, maintenance and strata fees are counted. Check your budget against your current loan rate, not the rate you bought on.

Why Pricing the Rent Correctly Matters More Now

With renters stretched and a little more stock available, an overpriced property can sit empty while tenants choose the alternatives. The arithmetic is simple. If a property would lease at $900 a week and is advertised at $950, a single vacant week costs $900, which takes 18 weeks of the extra $50 to win back. Two or three empty weeks can wipe out a year's difference.

Price against recent comparable leases in your street and building rather than last year's figure or an online estimate, and review the price promptly if enquiry is slow.

Know the NSW Rules

• Rent can be increased only once every 12 months, and not within the first 12 months of an agreement.
• Since 19 May 2025 a landlord needs a valid reason, with supporting evidence, to end a tenancy.

Together, these make each annual review important. A rise set too high can lose a good tenant, and one that is missed cannot be made up until the next anniversary. Check the current rules with NSW Fair Trading before acting on anything specific.

Keep Good Tenants and Keep Up Maintenance

A reliable tenant who pays on time and looks after the property is worth a great deal when every vacant week counts. Start renewal conversations early, keep any increase in line with the market, and respond to repair requests promptly. Coastal conditions are hard on paint, metalwork and appliances, so regular maintenance protects both the property and the tenancy.

A Note on Negative Gearing

Under tax changes passed by the Senate on 25 June 2026, from 1 July 2027 negative gearing for residential property is limited to new builds for properties bought after 7:30pm on 12 May 2026. Properties bought before then, including contracts signed before that time, are grandfathered under the existing rules. Everyone's position is different, so speak to your accountant or a registered tax agent about your own situation before making any decision.

How The North Agency Can Help

Our leasing and asset management team manages residential property across the Northern Beaches, from Dee Why and Collaroy to Narrabeen, Warriewood and Frenchs Forest. If you would like a current rental appraisal based on recent leases near you, or a second opinion on how your property is priced and managed, we are happy to help.

Frequently Asked Questions

Are rents still rising in Sydney?

Yes. Cotality's figures released on 1 October 2026 show Sydney house rents up 4.9 per cent and unit rents up 3.7 per cent over the year, even though Sydney dwelling values fell 7.0 per cent over the same period.

What is the rental yield in Sydney?

Cotality put Sydney's gross rental yield at 3.4 per cent in its October 2026 report, with houses at 3.0 per cent and units at 4.4 per cent. These are Sydney-wide figures, and yields on individual Northern Beaches properties vary.

Should I raise the rent on my Northern Beaches property?

Review it against recent comparable leases at each anniversary. In NSW rent can only be increased once every 12 months, so the figure matters, but with renters stretched an increase above the market risks a vacancy that costs more than the rise brings in.

How often can rent be increased in NSW?

Once every 12 months, and not within the first 12 months of an agreement. The rule applies to all lease types, including agreements that began before it came in.

Does negative gearing still apply to my investment property?

If you bought before 7:30pm on 12 May 2026, the existing rules are grandfathered. For properties bought after that, residential negative gearing is limited to new builds from 1 July 2027. Speak to your accountant or a registered tax agent about your own situation.

How do I get an accurate rental appraisal?

Ask a local property manager for an appraisal based on recent comparable leases in your street and building. Online estimates give a broad average, but condition, layout and features can move the achievable rent significantly.