Sydney has a pipeline of 194,000 multi-unit dwellings at various stages of development, a report by the Urban Development Institute of Australia (UDIA) shows. Multi-units include terraces and townhouses as well as apartments. These numbers are flowing through Domain.com.au, where 17,500 units were listed for rent in June 2017, and ballooned to 32,680 listings in June 2019. The result has been landlords asking for $25 a week less median rent than last year. But a Sun-Herald analysis of rental bond data has found the actual rent tenants pay has shifted both up and down by more than $100. A one bedroom unit in Chatswood recorded the steepest fall in median rent, from $585 to $469 per week between the September 2017 and March 2019 quarters. Dick Crampton, director at Shead Property Chatswood, which manages more than 1000 rental properties, said the supply of north shore rentals is at “an all-time high”.

Loading "In the last 12 months, I've not seen as much supply of rental available by quite a way," Mr Crampton, who has worked in the industry since 1972, said. "When properties were totally selling out off the plan about two or three years ago I suspect that probably 80 per cent of them were sold to investors. So I suspect it's either developers or investors leasing properties now." Advertised rental prices across Sydney recorded their biggest annual drop in 15 years this month, Domain data released last week shows, and this trend may continue. Tenants NSW senior policy officer Leo Patterson Ross said bond data shows tenants are paying less rent and prices may continue to drop.

"At a city-wide level, we've had rent prices set by restrictive supply for at least 14 years, probably longer," Mr Patterson Ross said. "It will take more than a few quarters for prices to correct to equilibrium." Sydney-wide rental vacancy rates have almost doubled from 1.7 per cent 2017 to 3.2 per cent this year. But on the upper and lower north shore, in the hills district and Sydney CBD, apartments are sitting vacant at more than twice this rate, SQM data shows. Belle Property Mosman agent Jamie Saksida said he had seen rental discounts of more than $100 per week recently and landlords were open to "ridiculous" offers. "Vacancy here is pushing closer to four weeks, so landlords are feeling the pressure of having to say yes to low offers rather than not having anything at all," Mr Saksida said. "I’ve had people say, 'I've put in a ridiculous offer and the owner has accepted'."

Domain research analyst Eliza Owen said the softer rental market may continue into next year as more new apartment buildings are completed. "Areas that are more at risk in a market where vacancies are rising would be the non-traditional rental areas, particularly in the north-west of Sydney for example," Ms Owen said. The number of deferred and abandoned multi-unit projects in Sydney rose last year with UDIA reporting a total of 29,030 multi-units were dropped in Sydney, about twice as many as in 2017. Most projects are taking longer to get the required pre-sale levels to proceed to construction, Urbis reported this month. Only 4 per cent of new flats sold at many sites in the March 2019 quarter, down from sales of 13 per cent in the September 2018 quarter, according to Urbis' quarterly surveys. Urbis expects "a significant drop" in sales of completed new apartments next year. “We’re seeing a cautious market as buyers and investors anticipate a drop in apartment prices," Associate Director at Urbis Alex Stuart said.