- Sydney records 0.16 ppt rise in vacany rates month-on-month.
- The seasonal slowdown will make way for a busy New Year as international students return for the start of the university semester in 2024.
- Landlords are frequently looking to sell as mortgage repayments take a toll.
Sydney’s rental market recorded a significant uplift in available rentals, according to the latest PropTrack rental vacancy rate figures.
Second to Darwin, which recorded a monthly vacancy rate rise of 0.18 percentage points, Sydney saw vacancy rates increase by 0.16 percentage points to 1.28%.
Quarterly, vacancy rates were down 0.03 ppt, and annually, were down 0.27 ppt.
Since the beginning of the pandemic, Sydney vacancy rates have plummeted 59%.
“Sydney showed a noticeable easing in conditions, with the rental vacancy rate up 0.16 ppt in November. Other major capitals also recorded small increases,” said report author and PropTrack senior economist, Paul Ryan.
“Over the past year, Sydney (–0.27 ppt) and Melbourne (-0.44 ppt) have seen the sharpest falls in available rentals, placing exceptional pressure on renters.”
A seasonal slowdown for rentals
NextGen Property Management managing director, Chris Dimitropoulos told The Property Tribune that he observed an easing of vacancy rates across the company’s portfolio, which spans most of Sydney.
“It is not because of more rental properties coming into the market,” Dimitropoulos said.
“In fact, a number of our landlords have sold their properties in recent months and a lot are continuing to think or have confirmed plans to put their properties on the market early next year.
“Very few of these properties are being sold to investors.”
Dimitropoulos believes the slowdown is seasonal, with fewer tenants giving notice and fewer tenants actively looking for a property right now, hence more choice and less competition.
“There are definitely fewer and fewer prospective tenants attending our opens compared to even a month ago when we would have multiple attendees and we would receive three to five applications at the first open.
“In addition, we no longer see international students looking to rent a property. This was a big part of our open attendees earlier in the year, but I expect that to change in the New Year.
Dimitropoulos said he was seeing fewer applications come through for rentals.
“At the moment we are lucky to get one. Previously we were seeing three to five per property at the first open. We have had to reset expectations with our landlords.”
Less stress for tenants
“At the moment, there is more choice and less panic for tenants, so we don’t see tenants applying to multiple properties,” said Dimitropoulos.
“Up to a month ago, though, I know for a fact that good tenants that wouldn’t traditionally have had to, were actively doing just that.
“That is not the case at the moment though as prospective tenants are more in control.”
Pain on both sides of the fence
Renters have been significantly stretched in recent times, with rental increases rising to levels not seen before.
Dimitropoulos said the positive news is that he hasn’t seen any tenants fall behind on rent yet.
“I just don’t know how long this can continue for, though. We understand both landlords and tenants as neither is happy at the moment.”
He observed that despite rents rising, landlords are doing it tough.
“Everyone of our landlords is concerned about their mortgage repayments,” Dimitropoulos told The Property Tribune.
“The increases we had in the last two years on rents, has not been enough.
“A week doesn’t go by in the last six months that a landlord hasn’t come forward asking to discuss selling their property.
“It is actually sad seeing so many landlords that held to their properties for such a long time to now have to sell.”