If you’re a Landlord, you may have seen firsthand the volatile conditions and uncertainty happening right now across the Sydney Rental market.
It’s no surprise what’s causing it too.
With our international borders closed, RBA Governor Philip Lowe said in the July RBA meeting minutes that the reduced flow of new arrivals into Australia is affecting real estate.
According to property analysis firm SQM, the monthly rental vacancy figures show that Sydney’s residential vacancy rate is now sitting at 4%, making this the highest in the country and the highest on record since 2005.
With rental vacancies in Sydney at such a high point, rental prices are likely to continue to fall over the next few months – which people are starting to call a “rental slump”.
However, these downward trends aren’t all over Sydney.
According to Domain’s recent report, our local Northern Beaches suburbs have actually had the highest rental percentage rise across Sydney compared to this time last year – bucking the trend.
In Palm Beach, house rents have risen by almost 30%, Narrabeen by almost 20% and Manly Vale by just over 10%. As for apartments, we’ve seen North Manly and Beacon Hill also increase by around 17% too.
Balgowlah and Dee Why have particularly been star performers when it comes to rental growth across the board. But what’s most interesting is that, despite the market, no Northern Beaches suburbs in our area have actually experienced a decline.
What’s causing this?
We’re attributing some of this extraordinary rental growth to short-term holiday lets now converting into long-term leases due to lower tourism numbers.
We also believe that, with more people working from home and this remote trend becoming commonplace now, Sydneysiders are starting to move to areas they really want to live in, rather than just living near the city to be close to the office.
All in all, it’s great news for Landlords in the Northern Beaches region.
Commercial Asset Management
COVID hasn’t just affected the residential rental market, but also the Commercial rental market as well. Based on closures, physical distancing and a general reduction in trade, commercial tenants are seeking rental relief from their landlords.
Are tenants keeping up with their rent?
Due to all of this turbulence, one particular point of interest is rental arrears.
With the unemployment rate being high at the moment, this can have a flow-on effect to Landlords, especially if a tenant defaults on their payment.
We understand that Landlords may be feeling a bit nervous with the potential rental slump on the horizon.
How do Landlords avoid this rental slump?
Fortunately, due to our proactive approach and experience in property management, at Upstate, we’ve seen a very low rate of late rental payments or defaults – which we’re very proud of.
This, combined with the strong rental trends and lower vacancy rates across the Northern Beaches, is helping Landlords ride out this storm.
Speaking of which, we’d like to thank all of our Landlords who we’re working closely with during this time. No matter what the next few months have in store for Sydney’s Northern Beaches, you can rest assured your properties are in good hands with us at Upstate.
Our digital-first approach and passion for our local community will always ensure you receive the best leasing and property management service.
Thanks for reading and if you have any questions about the rental market in Sydney, please don’t hesitate to contact us.
We’re always here for you – especially during this time.
If you need guidance to improve the performance of your investment property, speak to John Hall and the Upstate team today – we can do a 60-second health check to see how we can help you avoid the rental slump.