Improving economic and health prospects have prompted tenants to rent vacant rental properties, new data shows, as east coast states emerge from lockdown with high vaccination rates and more certainty.
Rents will likely continue to rise and vacancy rates will continue to fall once international borders reopen, but the rental market will not experience the same boom as the sales market due to the glut of apartments, have said officers.
Rental vacancy rates continued to decline in October, with substantial declines in post-foreclosure cities of Sydney (2.2%, from 2.5% in September), Melbourne (3.1%, from 3, 5%) and Canberra (0.8 percent, vs. 1 percent), the latest figures from Domain show.
COVID-zero capitals have largely had tight rental markets since the start of the pandemic, and it became even more difficult over the month to find a rental in Brisbane (1.2% vacancy, up from 1.00% vacancy). 3%) and Perth (0.5%, down 0.6 percent).
The other capitals remained stable with Darwin at 0.6%, Adelaide at 0.5% and Hobart at 0.4%.
Ray White, general manager of property management, Emily Sim, said improving rental markets coincided with the exit from foreclosure.
“We’re only seeing the last of these decisions before we return to work and resume our new normal next year. We have some clarity by the end of 2021, which was not clear at the end of 2020, ”Ms. Sim said.
“We’re just seeing the last wash of people saying, ‘What’s our final lifestyle mix? Are we going to commute? Are we going to work from home?
“I think we’re going to see a further tightening of the market; I expect the demand to increase when we have the borders reopened, ”she said, adding that she was already responding to demands from the expat community in Britain, Germany and Switzerland.
With inner-city and apartment-dominated markets recording higher vacancy rates, including Sydney City Center (3.2%), Parramatta (3.2%) and Ku-ring-gai ( 3.1%), Sim said the lifestyle and rental housing markets were seeing better recoveries.
Northern Beaches rentals have strengthened over the past 18 months, consistently ranking at the top of rent increases, and citywide asking rents for homes have hit a new record.
The same pattern was repeated in Melbourne, where vacancy rates in the inner city, high density apartment markets lagged behind the rest of the city. Melbourne’s CBD still has a high vacancy rate of 5.8%, although down from 14.4% a year ago. The geographic region of Stonnington East had the highest vacancy rate at 6.2%.
This type of neighborhood would continue to weigh on the recovery of the rental market, preventing a “turning back”, according to Mike McCarthy, general manager of Barry Plant.
“We will see a gradual improvement more than a boom. We will see this rental demand increase. I just don’t know if it will return to the all time highs that we have seen, ”he said.
The city’s high vaccination rates and the end of the world’s longest lockdown have given tenants more confidence than a year ago, Mr McCarthy said.
“This general feeling of trust means they are renewing their leases. This will push some of those people who don’t want to stay at the house to rent again, ”he said.
“The other thing with all of this as well is that we are seeing such a shortage of manpower in so many areas that we are starting to see real pressure on wages… and that is leading people to say:” Not only will I get a job, I will have more money too.
This has yet to be considered the median asking rent price in Melbourne, held at $ 430 per week – as all other cities have seen their rents rise – making it the cheapest Australian capital to rent a house.
The rental market in Perth has also seen some kind of rebound thanks to the combination of a positive flow of interstate migration and landlords stranded in leases due to exploding construction deadlines, according to Damian Collins, chairman of the Real Estate Institute of Western Australia.
“We are certainly facing a significant shortage of rental stock and it is a real challenge,” he said, adding that the city only recorded its peak vacancy rate of 7.3%. in 2017.
“A lot of tenants who have bought properties to build are still sitting in their rentals. We expect 8,000-10,000 to vacate their rentals which will free up inventory, but this will be drip fed over the next 18 months.
But even once international borders open, the rental market might not relax, Collins said, as investors haven’t rushed into the market at high enough levels and construction hasn’t kept up. the pace of demand.
That meant rents had to increase until the vacancy rate rises again, which will take some time, with the reopening of borders only increasing demand, he said.
“We are the cheapest place to rent relative to our income. While this is painful for some tenants, most are able to cope with rising rents.