Is the renovation revolution luring Aussies into overcapitalising?
Undertaking property upgrades have long been a favourite Australian pastime, and renovation fever has only been intensif...
Sydney’s rental vacancy rate has dropped to a four-year-low – and investor pressures are reportedly to blame.
According to the Real Estate Institute of New South Wales (REINSW), mum and dad investors leaving the market are the reason for the dwindling supply of available rental properties.
In Sydney, the vacancy rate is now just 2.6 per cent, which REINSW CEO Tim McKibbin highlighted as “the lowest rate for Sydney that we’ve seen since May 2018, when the rate fell to just 2.4 per cent”.
He explained: “The decrease is attributable to lower vacancies in Sydney’s inner and outer rings, which dropped 0.2 per cent (to 2.9 per cent) and 0.6 per cent (to 1.7 per cent) respectively. In contrast, vacancies in the middle Ring rose by 0.1 per cent to be 4.0 per cent.”
Back in April, that vacancy rate was sitting up at 4.3 per cent.
The CEO said the latest lockdown is to blame for the lack of supply.
“With businesses shut and people out of work, our member agents are telling us about mum and dad investors who are selling their hard-earned investment properties to stay afloat.”
And with so little stock sitting on the market, these investment properties are being bought by owner occupiers, which is, in effect, removing these properties from the rental sector.
Mr McKibbin has warned that the impacts will continue to be felt across the rental market for a while yet.
“This unpredictability will likely continue as we see the impact of current lockdown conditions continue to trickle through to vacancy rate figures in the coming months.”
Sydney’s not the only part of New South Wales feeling the squeeze. Newcastle has also seen a significant drop in its vacancy rate over the month of August to 2.2 per cent – a 1.8 per cent decline on the month prior.
It’s a similar story across the Central West, Mid-North Coast, Murrumbidgee, Northern Rivers, Orana and South Coast areas, according to the CEO.
Bucking the trend is Wollongong, which saw its own rental availability pressure ease off slightly – from 1.4 per cent to 1.5 per cent.
It wasn’t the only area to see a slight reduction in rental pressure, with Mr McKibbin also noting Albury, Central Coast, Coffs Harbour, New England and south-eastern areas as all experiencing their own “slight uptick” in the availability of rental accommodation of late.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.
Real estate is a type of real property that refers to any land and its permanent improvement or structures that come with it, whether natural or man-made.
The vacancy rate is the proportion of inhabitable or vacant units available within a rental property.