Earlier this week, SQM Research released its December rental vacancy and asking rent series, which showed Sydney’s rental vacancy rate had rocketed to a series high 3.6%, with nearly 8,000 more rental properties on offer (25,177) than at the same time in 2017 (17,404):
At the same time, Sydney asking rents have fallen by 3.4% (houses) and 2.3% (units) over the past year:
With Sydney well and truly becoming a tenants’ market, landlords are “making desperate offers to lure new tenants”:, according to RealEstate.com.au:
REINSW president Leanne Pilkington said December vacancy rates represented a steep climb from those recorded earlier in 2018.
“Our feedback from agents suggests that the market is being flooded with new units, making older units more difficult to rent,” Ms Pilkington said.
Agents have responded by incentivising tenants with attractive offers, she added.
“Agencies are using tactics such as decreasing rent prices and offering free rent periods to secure tenants,” Ms Pilkington said.
As we keep noting, the weakening rental market comes at the same time as Sydney dwelling values are plummeting, already down nearly 12% peak-to-trough and falling at an annualised rate of around 16%:
This is a nightmare scenario for leveraged Sydney landlords, who are facing an income squeeze at the same time as the value of their investment falls.
