Renting in Sydney during COVID-19

It’s been almost three months since the start of our COVID-19 restrictions. What’s been happening within the Sydney rental market? It’s been a busy time for some, a quiet time for others, a confusing time for most, a tenant’s market (yay! Finally), a landlord’s nightmare, a trying time for property managers and all-in-all, a very different and changed landscape within which to rent and be a tenant, and to own and be a landlord.

Sydney Rental vacancy rates

In many areas of Sydney, rental vacancy rates are at an all-time high. Areas such as Sydney City (postcode 2000), parts of the Eastern Suburbs, Northern Beaches, Lower North Shore and Inner West. But, not all areas are seeing high vacancy rates. So what is accounting for the differences?

A major factor is that COVID-19 restrictions have meant that AirBNB cannot continue at the moment. While for years, we have seen a removal of long-term rentals from the market in favour of short-term AirBNB, we’re now seeing a sudden influx of AirBNB properties back in the long-term rental market. It’s easier than ever to get a furnished home and a short-lease of 3-6 months, whereas previously it was difficult to get furnished homes and a 12-month lease was standard. The withdrawal of AirBNB properties has had a significant impact on the number of homes on the long-term rental property market. But only in areas that had a lot of AirBNB properties.

Tenants are Moving - But Where To?

There is a considerable amount of movement with tenants. Lots of things are going on in this space:

1. Younger people, perhaps casually employed for < 1 year may have lost their jobs. They’re moving back in with parents.

2. Families are learning that they can rent a bigger or better home for the rent that they’re currently paying - so they’re upgrading for the same rent.

3. Kids who currently live at home are taking advantage of lower rents and are moving out of home for the first time, perhaps renting a home with friends

4. People who lived further out of the city are seeing rents come down closer to the city (remember, these used to be AirBNB areas and are now flooded with ex-AirBNB properties; vacancies are high; rents have come down) - so those people are seeing an opportunity to finally live closer to the city in an affordable home

5. Tenants are seeing rents come down, approaching their agents / landlords for a rent reduction to bring the rent back in line with the market - and if their requests are declined, they’re voting with their feet, sometimes moving very close by, and saving lots of rent

6. People who chose to live closer to the city to minimise their commute time are now working from home for the foreseeable future - those people are moving further out where they can get better value for their money, or even save money

7. Tenants who lived in share housing are now able to afford to live alone as rents have come down

How is all of this Impacting Sydney Rental Stock Levels?

I have seen a tremendous increase in Sydney rental stock. In other words, there is so much more on the market now, than what was previously on the market. It makes sense as the rental vacancy rate is high, but it is also a factor of the significant movement of tenants that has been brought on by COVID-19: each time a tenant moves, a vacancy is created and / or a home is leased.

Getting a Great Rental Home in COVID

It’s still the case that the great homes are leasing quickly - often within 1-3 days of coming on the market. Not-so-great homes are still lingering, and homes that are priced too high are also lingering. In general, I am finding that the advertised rents have come down enormously. What was previously $750 per week is now advertised at $650 per week; what was previously $950 per week is now advertised at $800 per week. The reduction has often already been factored into the asking rent, so there may not be the opportunity to negotiate rent quite so much on those sorts of homes. However, it’s always worth asking the question for the home that you love.

Melissa Maimann is a licensed real estate agent, buyer's agent and rental search / relocation agent in Sydney. She saves tenants time and frustration offering an affordable service that finds and secures the best rental properties quickly, easily and efficiently. If you need a Licenced Real Estate Agent to find your next rental home for you, don't hesitate to make contact.