‘The investment property market is being hit hard by the pandemic which is seeing a huge increase in residential properties up for rent which is pushing down rental income. Inner city Sydney and Melbourne are the hardest hit.
There are a couple of factors causing this:
– Young renters are moving back home with Mum and Dad to cut their costs as their wages fall or they lose their job.
– International students have been locked out of our unis for the time being and don’t need accommodation.
– No tourists means no customers for AirBnB properties. So those owners are putting properties back on the longer term rental market.
For tenants it means it’s the perfect time to renegotiate their rent.
For landlords the objective is to lock in good tenants for a long period even if it means offering incentives.
SQM Research has revealed the national residential rental vacancy rate has recorded a large one month jump from 2 per cent in March to 2.6 per cent in April.
All states recorded increases in vacancy rates with the exception of Darwin.
The year on year comparison also revealed rises when the national rental vacancy rate in April 2019 was 2.3 per cent compared to 2.6 per cent recorded for April 2020. Only Perth and Darwin recorded lower vacancy rates compared to this time last year.
As a result over the month, Capital city asking rents decreased 1.3 per cent for houses and remained stable for units for the week ending 12 May 2020. National combined rents are now 3.1 per cent lover over the last 12 months.