Desperate landlords are offering Sydney homes rent free for up to a month or at reduced rates in an attempt to attract new tenants and stave off costly long-term vacancies.
The increasingly generous offers helped push advertised house rents down nearly 5 per cent over March, while unit rents dropped 3.1 per cent, SQM Research showed.
Rents were likely to fall further as the coronavirus crisis continued and vacancies climbed, SQM reported.
There is already evidence social distancing measures and travel bans drove a spike in vacancies in areas once dominated by Airbnb rentals and international student accommodation.
Data from realestate.com.au showed a 20 per cent rise in Sydney rental listings in the first week of April, which economist Nerida Conisbee noted was mostly from short-term accommodation becoming available.
The trend was most prevalent in northern beaches suburb Avalon Beach and inner west enclave Rozelle, where the supply of rental houses doubled.
There was a similar increase in the supply of rental units in eastern suburbs Clovelly, Double Bay and Little Bay.
Younger renters uncertain about the future of their jobs were also beginning to move out of sharehouses in areas such as Balmain to move back in with their parents, Ms Conisbee said.
Some of the more generous rental deals are being offered in areas with a high supply of new housing, particularly units.
Multiple homes in the Pagewood Green estate in Eastgardens are being offered with four weeks’ free rent.
Apartments in a Mascot building on Gardeners Rd are being offered with free rent for the first two weeks.
Numerous Toongabbie homes in Western Sydney are being listed with a rent free period, including a four-bedroom duplex on Burrabogee Rd with the first month offered rent free.
The $650 per week price is also well below the 2018 advertised rent of $775.
It comes as The Daily Telegraph reported Wednesday that homes in the Opal Tower in Sydney Olympic Park were being offered with up to four week’s free rent.
The tower was in the national spotlight in late 2018 after residents were evacuated due to dangerous cracking. The area has one of the largest pipelines of new unit projects.
Nearby estate Vivacity has homes advertised with two weeks’ free rent, while the Kingston Quarter in nearby suburb Meadowbank has numerous homes offered with a waiver on the first three weeks’ rent.
“Landlords are most under pressure in areas where there is a high supply of new units that are very similar because tenants have (alternatives) if they can’t get better rent,” Ms Conisbee said.
SQM Research director Louis Christopher said falls in rent last month were “a sign of things to come”.
“We are likely to record significant increases in rental vacancy rates as 2020 progresses,” Mr Christopher said.
Property Investment Professionals of Australia chairman Peter Koulizos said tenants were in a good position to negotiate rents and landlords would need to be flexible.
“Landlords are not in the best position to find new tenants at the moment and should be open to working something out,” he said.
State government announced this week a $440 million relief plans for tenants and landlords who lost income due to COVID-19 restrictions.
Half the money will be allocated to residential renters and is targeted at keeping people in rentals over the next six months.
The Government has ordered a six-month moratorium on new forced evictions if the tenant is in rental arrears because they are suffering financial hardship due to coronavirus. It applies to tenants who have lost 25 per cent or more of their income.
BIGGEST INCREASE IN VACANCIES
Source: REA Group
Aidan Devine, news.com.au, 18 April 2020
Aidan Devine, realestate.com.au, 18 April 2020