Sydney rents hit the skids

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Via the AFR:

The residential vacancy rate in greater Sydney picked up to 2.2 per cent in December from 2.1 per cent in November, figures from the industry group showed on Monday. The increase, driven by middle- and outer-ring suburbs, took the NSW capital’s rate back up to a level it last touched in July 2013. Sydney’s vacancy rate was last higher in September 2012, when it was 2.5 per cent, REINSW figures showed.

The numbers, which fit with the rising Sydney vacancy rate reported last week by consultancy SQM Research, were a sign for landlords that they should prepare for a year in which tenants increasingly took the upper hand, REINSW president Leanne Pilkington said.

“I can’t see there’s going to be any growth in rentals,” Ms Pilkington told The Australian Financial Review. “We need to expect some stability. Landlords have got to be realistic about the rents they’re expecting.”

The pain for some landlords has already started. Separate figures published on Monday by data provider CoreLogic showed Sydney house rents fell 0.3 per cent in December to a median weekly figure of $599. Unit rents also fell 0.3 per cent from November to $561. Melbourne house rents rose 0.1 per cent to $445 while unit rents slipped 0.1 per cent lower to $427, CoreLogic said.

Despite ribald immigration. Not a good sign.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.