The REINSW Vacancy Rate Survey highlights the impacts of COVID-19 on the NSW rental market.
Vacancies continue to rise across New South Wales, according to the REINSW Vacancy Rate Survey results for May 2020, as COVID-19 disruption continues to impact the residential rental market.
Sydney vacancies
Vacancies in Sydney increased for the third consecutive month and now sit at 4.1 per cent, up 0.3 per cent from April and 1.1 per cent from March.
“Sydney’s Inner Ring experienced the most significant change, rising 0.7 per cent to 5 per cent,” said REINSW CEO Tim McKibbin.
“This is an historic high. The last time vacancies in the Inner Ring broke through the 5 per cent barrier was in June 2002, almost 18 years ago, when vacancies hit 5.1 per cent.
“The Middle Ring also increased, with a 0.2 per cent rise to 4.6 per cent. Sydney’s Outer Ring was alone in recording a decrease in rental vacancies, falling 0.4 per cent to 2.7 per cent."
Mr McKibbin said these results are evidence of the extent of COVID-19’s impact on the market.
"With so many people experiencing job losses or reduced pay, it’s not surprising to see inner-city properties with higher weekly rents being relinquished by tenants, either for more affordable options in suburbs more distant from the CBD or to move in with family members," said Mr McKibbin.
“We’re also seeing a continuation of the trend for short-term accommodation properties being listed for long-term rentals.
"With tourism plummeting, short-term rental cancellations have sky-rocketed, meaning landlords have had to rethink their investment strategy and list their holiday rental properties on the long-term market.
“Together, these factors have resulted in an increase in rental vacancies in the Inner and Middle Rings, which is a trend that’s likely to continue in the coming months.”
Regional vacancies
Vacancies in the Hunter region increased by 0.4 per cent to sit at 2.4 per cent, and the Illawarra region remained stable at 3.6 per cent.
Likewise, many regional areas reported marked increases in vacancies during May.
The Mid-North Coast rose to 3.2 per cent (up 0.6 per cent), Murrumbidgee jumped to 2 per cent (up 0.9 per cent) and New England climbed to 3.9 per cent (up 0.5 per cent).
Bucking the upward trend, the Central Coast, Coffs Harbour, Northern Rivers and Orana regions all recorded drops, while Albury and the Central West remained stable.
“These are uncertain times and the Vacancy Rate Survey results reflect this,” said Mr McKibbin.
“Higher vacancy rates are likely to remain the norm in the coming months in many areas, particularly for metropolitan hubs and holiday areas, and this will have the knock-on effect of decreasing rents as landlords are faced with more competition to secure tenants.
“How long this trend will continue is anyone’s guess.
"It’s really a case of ‘watch this space’, as the impact of easing restrictions and people returning to work starts to filter through to the housing market.”
Residential vacancy rate percentage
The REINSW Residential Vacancy Rate Report is based on the proportion of unlet residential dwellings to the total rent roll of REINSW member agents on the 15th of each month.
Carried out monthly, the research – a survey of REINSW member agents conducted by Survey Matters – collects the total properties on agency rent rolls, the number of properties that were vacant on the 15th of the month, and the postcode in which a majority of agents’ rental properties are located.
The suburb-level rates reported by agents are weighted based on ABS Census 2016 Dwelling Characteristics.
The May 2020 report is based on survey responses covering 106,617 residential rental properties.
View the Vacancy Rate Survey report here
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