EWR’s Rental guides are available for Australia’s capital cities covering the March Quarter of 2020. It’s important to note that as the REIA’s data draws on the previous quarter, the full effect of the pandemic is expected to be reflected in next quarter’s data.
At the city level, over the quarter, the median rent for three-bedroom houses increased in all capital cities except for Brisbane and Perth, which remained steady and Darwin, which decreased. The median rent for two-bedroom apartments increased in all capital cities except Darwin, which had a 2.4% decrease. However, drilling down into suburbs revealed declines in rents. The sharpest drops in Sydney and Melbourne were in inner city neighbourhoods such as Surry Hills (5.8%) and Docklands (5.1%) where workers in the hospitality and tourism sectors are more likely to rent and, hardest hit by the pandemic, have to give up their rentals. While some areas saw a rent decrease in the March quarter, year on year, the rents had a net increase: in Sydney, Mosman rents increased 8% from June 2019 and Pymble 14% respectively.
A leading indicator of pressure on rental rates is the Vacancy Rate. This refers to the % of rental properties available at a given time. A higher rate indicates greater choice for prospective renters, and downward pressure on rent levels. As a guide a 3% vacancy level is considered to provide market stability with no overall upward or downward pressure on rent levels. Year on year, Adelaide and Canberra are bucking the trend, whereas in Sydney the opposite is the case.
With the closed border, net overseas migration is at zero impacting demand. Anecdotally, however, some areas are experiencing high demand from Australian expats returning home, unable to move back into their tenanted residences.
Hobart has traditionally a tight rental market due to many properties being let through Airbnb. However, with the border closed and no tourism, many of these properties have now been put on the open market.
Our expectation is that the rental market will remain weak until such time as the international border reopens and we see a rise in net migration levels.
To receive a copy of our complimentary rental guides please email enquiries@ewrelocation.com or call 1300 762 388