RENTAL accommodation in outer and inner Sydney suburbs continues to plummet

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RENTAL accommodation in outer and inner Sydney suburbs continues to plummet, prompting renewed calls for banks to pass on the latest cut in official interest rates.

The Real Estate Institute of NSW says the percentage of available properties for rent in suburbs more than 25 kilometres from Sydney's CBD fell from 1.1 per cent in February to 0.9 per cent in March - the lowest result recorded since June 2008.

Overall Sydney rental vacancies fell by 0.1 per cent to 1.2 per cent, the lowest recorded since October last year.

"While a tight rental market is good news for landlords, for prospective tenants the results are bleak," institute president Steve Martin said in a statement.

For there to be sustained improvement in rental accommodation availability, he said more investors were needed in the market.

"That goal isn't made any easier when the banks refuse to pass on interest rate cuts, no matter how small," he said.

In inner city suburbs, a radius which extends 10km from Sydney's CBD, rental accommodation decreased by 0.1 per cent to 1.2 per cent in March.

Middle suburbs - those located ten to 25km from Sydney's CBD, saw slight increases in the amount of rental accommodation available, rising from 1.3 per cent in February to 1.5 per cent in March.

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Nobody believes REI's spruiker data after they reported there were only 700 properties left in the entire Sydney for rent. :rolleyes: 1%? rubbish!

Sydney's rental vacancy rate is climbing steadily up. One of my friends just negotiated $20 down for his rent with the landlord.
 
Hi sphinx,

Long time no hear. Now, I agree the REI’s spruik a lot of rubbish however I’m not so sure that “nobody believes” them. I actually suspect that their messages are fairly widely accepted by the public.

The Age in Melbourne doesn’t even bother with expensive journalists for their weekend property section. They just have Enzo Raimondo, CEO of the REIV, write the content for them. His infomercials are presented as fact and probably swallowed from-the-root-to-the-fruit by many readers.

Anyway, I’m interested, roughly how much rent is your mate paying and what suburb are we talking about?

Regards - BJ
 
Nobody believes REI's spruiker data after they reported there were only 700 properties left in the entire Sydney for rent. :rolleyes: 1%? rubbish!

Sydney's rental vacancy rate is climbing steadily up. One of my friends just negotiated $20 down for his rent with the landlord.

to be fair that was Sydney CBD

but i do agree rentals are starting to loosen up
 
Rents are still going well down my way.

Rent on the estate I sell just went up $20 per week to $460 and the last house available was applied for as soon as the exchange had gone through, tenant will move in the day after settlement. The agent has plenty of tenants looking for homes to rent in that price range.
 
If all the first home buyers are now moving into their newly acquired properties, what do you think this will do for vacancies?

I don't think there will be a glut of rental properties on the market, enough to force prices down though...
 
I bought the latest 'Australian property investor' mag, to check out all you somersofters in it. Well done everyone.

However in the back pages there is section on vacancy rates. Anyone notice that vacancy rates everywhere are through the roof from 12 months ago..?? And Sydneys vacancy rates are the worst in the country.

A few examples,.....

Sydney,........8.8%
Waverton,.....8.9%
Concord,.......8.7%

The central coast is not so bad,....

Gosford,.......2.5%
Wallsend,.....3.4%
Newcastle,...5.4%

And way out west it's not so bad either,...

Maitland,.....3%
Dubbo,........4.7%
Tamworth....1.5%
Lismore,.......1.6%


Bit different to what I expected to see.

What's happened to the rental shortage?
Does anyone pay much attention to these figures from API?
Is anyone seeing this, as it conflicts with the article at the start of this thread.

See ya's.
 
What's the vacancy rate like in the ACT at moment?


Got no idea what it's like on the ground, but from API mag, says Canberra's vacancy rate is just 1.1%.

Sydney,.......4.0%
Melbourne,...3.9%
Brisbane,.....1.9%
Adelaide,.....1.5%
Perth,.........1.1%
Canberra,....1.1%
Darwin,.......2.1%
Hobart,.......1.2%.


See ya's.
 
Anyone notice that vacancy rates everywhere are through the roof from 12 months ago..?? And Sydneys vacancy rates are the worst in the country.
Sydney,........8.8%
Waverton,.....8.9%
Concord,.......8.7%

TC, that may well be due to the huge take-up of the FHOG/B which is over-represented in NSW with FBH here taking up 27,185 (35%) out of the total of 78,154 to date.

My suspicions are that it may (temporarily) get worse than that too, as a number of FHB have stated they are only planning to stay in the property the required 6 months and then turn it into an IP :eek: before they move back home with mummy & daddy. (onya GenY :))
 
If all the first home buyers are now moving into their newly acquired properties, what do you think this will do for vacancies?

I don't think there will be a glut of rental properties on the market, enough to force prices down though...

I think this is right, and don't forget to add the cashed up incvestors taking advantage of the low rates and the "boom" in lower end properties.

The combo of the two means more people owning - which means less renting, but the properties they rented are still available as IP's, and more IP's available from the investor activity.

It all adds up to more rentals available, but less renters.

Ironically, what will happen is the yields will drop again, the lower end boom will slow down, then investors will disappear, so the market will tighten up again next year.
 
I think this is right, and don't forget to add the cashed up incvestors taking advantage of the low rates and the "boom" in lower end properties.

The combo of the two means more people owning - which means less renting, but the properties they rented are still available as IP's, and more IP's available from the investor activity.

It all adds up to more rentals available, but less renters.

Ironically, what will happen is the yields will drop again, the lower end boom will slow down, then investors will disappear, so the market will tighten up again next year.

I'm finding a lot of lower end properties are actually investors selling. Most of them seem to have tenants.

If a tenant moves into their PPOR (which was owned by an investor) then the balance doesn't change. If they were living at home then the number of tenants also doesn't change. But the number of rentals declines while the FHO people move in.

What I'm thinking about is in 6 months time when a lot of people who only bought because of the FHOG move back home with mum and rent their PPOR out.
Then the number of IP's available will be higher. Then rental vacancies will rise.
That's why I'm being picky about what I buy. It needs to be attractive in those times to attract tenants.

My thoughts anyway- feel free to disagree. I'm just learning here.
 
I'm finding a lot of lower end properties are actually investors selling. Most of them seem to have tenants.
I'm seeing that too. Some investors who are taking a negative view of the future of the market are taking advantage of the FHB activity to either dump stock or sell their dogs (even if the are +ve about the future).

The other thing I'm seeing is massive UNDER market rental being charged on some of these lower (price - not quality) end properties. I've seen a number of properties being rented out at $280 pw when the going market rate is more like $390pw. I wonder if the LL's got decent advice from their PMs if they would not change their minds and keep them?
 
I bought the latest 'Australian property investor'
However in the back pages there is section on vacancy rates. Anyone notice that vacancy rates everywhere are through the roof from 12 months ago..?? And Sydneys vacancy rates are the worst in the country.

.
I would have thought if there were many vacant properties they would be adverstised for lease but that's not the case.
I've been monitoring a few suburbs for over a year now on Domain.com.au & Realestate.com.au and now there are less listings than 12 months ago.
Perhaps first home buyers are buying properties from investors so those properties are no longer in the rental pool.
 
I'm not sure whether the FHB activity alters rental demand all that much.

FHB rents (by definition they haven't bought a first home). FHB buys house from investor = 1 less rental property, also one less renter. Net effect on rental vacancies zero.

I think a bigger effect on rental vacancies is people per rental unit. The people per household must have a greater elasticity when unemployment is increasing. This could be investors or FHB's who are having problems with repayments due to employment issues moving back in with their parents and renting out their IP/FH. It also occurs when people downsize their rental house/flat.

I think the rise in rental vacancies in the northern sydney area and eastern suburbs is not primarily due to investors selling but due to people downsizing, particularly if they work in finance industry due to the GFC. Someone who rents a 4br house rents a 3 br, someone who rents a 3br moves into a 2br. This has an effect on rental density and an effect on rental vacancy. In the end when people downsize, the total number of houses or units required by the market reduces.

The two tend to co-occur (increased properties for sale and increasing rental density)However the association between increasing sales and increasing vacancies is a spurious one (ie one does not cause the other). They are both caused by increased economic stress on the people in that area (either through unemployment or wealth effect due to stockmarket fall).

The investor or owner sells. If it is an investor, the tennant has to find somewhere else to rent. If it is an OO, they have to find somewhere to rent. The net effect on actual vacancies of increased selling is probably marginal. If the rental density increases by 10% though, well you are going to need 10% less rental units and end up with a vacancy rate that goes from 2% to 10%.

If the unemployment rate ticks up, then we may see what is happening in the Sydney upper market vacancies start to occur in the lower and outer sydney areas due to the effect of unemployment on rental density.

Resource states and their cities may have a better time than Sydney (due to unemployment) if the commodity supercycle contines. And a worse time if it doesn't.
 
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The other thing I'm seeing is massive UNDER market rental being charged on some of these lower (price - not quality) end properties. I've seen a number of properties being rented out at $280 pw when the going market rate is more like $390pw. I wonder if the LL's got decent advice from their PMs if they would not change their minds and keep them?


I went to an auction yesterday. 2 bed unit, original kitchen etc, with a garage. Tenant has been there 14 years and is paying $170 a week.:eek: Market rent would be $270 minimum. Over $300 with a reno.

That's a lot of money to be losing each year.

Owner was about 30 (guestimate). I would have loved to ask why he was selling. It sold for $221,000.
 
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