Bondi to Byron: divergent pathways in NSW’s Metropolitan and regional rental markets during the COVID-19 pandemic

Abstract

ABSTRACT In this paper, we look to compare the differential responses of metropolitan and regional rental markets in the first 12 months post-pandemic in New South Wales, Australia’s most populous state. We employ descriptive statistics to analyse broad trends in both rental prices and transfers in and out of long-term rental supply through the short-term letting and property buyer markets. Moreover, we examine how these dynamics have played out at the local level using the contrasting case studies of Bondi in the eastern suburbs of Sydney and Byron Bay in the northern rivers of NSW. The results demonstrate that there have been distinctly separate responses to the pandemic across different geographical profiles, displaying cohort-level behaviours ranging from rental declines in inner-city areas to significant increases in high-price regional areas. Furthermore, a comparison of metro and regional markets highlights a strong and symmetrical association between short-term lettings activity and changes in long-term rental prices over the initial COVID-19 period. Finally, analysis of investor activity exhibits a highly reactive and geographically differentiated response to changes in rental yields. Ultimately, the findings of this study further the understanding of the contrasting responses at the local scale to the COVID-19 pandemic, the complex interplay between long- and short-term rental markets and help shed light on necessary future policy directions for NSW’s, and Australia’s, housing market.