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A spike in consumer lifestyle demand means it is now more expensive to rent on the Gold Coast than in Sydney, a new industry report has revealed.
Stats released by Domain have revealed that the exodus from Sydney is driving prices down as renters look for lifestyle destinations.
While Sydney housing rentals remain at a record high of $550 per week in March, the unit market has plummeted.
Unit rents held at $470 a week over the March quarter, a marked change following the decline over the previous three consecutive quarters.
Unit rents have recorded the steepest annual fall since Domain records began in 2004, tumbling 9.6 per cent, a $50 a week reduction, compared with the same period last year.
InvestorKit’s head of research, Arjun Paliwal, opined that Sydney was always going to be hit harder due to its reliance on overseas migration.
“As internal migration has been consistently negative in Sydney, with no positive internal migration growth in any quarter for the last 20 years as per ABS data, with that in mind COVID shutting our borders will have and has had greater rental market impact to locations like Sydney,” the researcher said.
Domain senior research analyst Nicola Powell noted the strong sea change/tree change was seeing the Gold Coast andCoast bearing the brunt of unprecedented interstate migration over the past three months.
Vacancy rates have sunk as low as 0.2 per cent, and house rent prices have rocketed by up to $75 a week in key suburbs.
“The rents now on the Sunshine Coast and Gold Coast are comparable to the expensive parts of the ACT and Sydney,” Ms Powell said.
According to the Domain report, house rents are rising at the steepest pace of annual growth in roughly 15 years. Sunshine Coast house rents have surged $80 above last year and $50 higher on the Gold Coast, to $580 and $560, respectively.
Unit asking rents on the Gold Coast have risen $25 over the year to $465 a week, and on the Sunshine Coast, $40 higher at $460.
“This (vacancy rate) is extremely low, to the extent I would say there’s a rental crisis in some of these areas,” she suggested, adding that “what will be happening on the ground is that prospective tenants are offering more (than the asking prices) because it’s so hard to find vacant property,” the economist told Domain.
The sharp uptick follows data released by the ABS in February which pointed to Australia’s capital cities having a net loss of 11,200 people in the last quarter of 2020, coinciding with the end of Australia’s first lockdown and the largest quarterly loss on record.
Despite Sydney’s migration falling, Mr Paliwal told Smart Property Investment that the trend could remain over the medium term.
“I don’t think this rental pain will continue long term, however, it will be some time before a bounce back will happen,” he concluded.
Rent refers to the payment made by a tenant periodically to a landlord for the use and occupancy of a property.