Tenants in empty city reap huge rent reductions following COVID-19
Renters are cashing in on high vacancy rates and plunging rents around Sydney’s CBD and inner suburbs, saving upwards of $10,000 a year. SEE WHICH SUBURBS HAVE HAD THE BIGGEST FALLS.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
Renters are saving upwards of $10,000 a year as they cash in on high vacancy rates and plunging rents around Sydney’s CBD and inner-city locales.
An exodus of migrants, closed state borders, growing unemployment and loss of tourists have reduced rent prices by almost 20 per cent in the city, with a flow-on effect to surrounding suburbs. Apartments that used to rent for $950 per week a year ago have dropped on average to around $750 in the city, according to data analytics firm SQM Research.
SQM Research managing director Louis Christopher said: “That’s a pretty big fall, that’s over $200 a week.
“The further you go out, the stronger the (rental market) is. If you considered the Blue Mountains, we’re seeing rental vacancy rates plummeting — I believe this is a result of people trying to get away from the city.”
Vacancy rates in Sydney’s CBD jumped to 16.2 per cent in May before dropping to 13.8 per cent in June.
MORE NEWS
Sir Brierley porn case delay as cops analyse 25,000 extra images
Newcastle ammonium nitrate could cause ‘disaster’: Expert
Radio reunion mooted for Hughesy and Kate
Director of real estate management company The Property Concierge Tanya Sassoon said in the eastern suburbs, rents had plunged at the bottom end but more expensive homes were still performing well.
“The sub-$1000 a week properties are definitely dropping and that’s because a lot of the people who were propping that market up were from overseas — Italian, Spanish, Brazilian — and they have all gone home and they were sharing and pushing that price point up,” she said.
Some landlords were offering some discounts to good tenants, while others were thinking outside the box to keep rental incomes coming in.
“I have one apartment in Bronte where we were getting $650 (a week) and we broke it down and we’ll get $50-$60 for the garage and easily get $600 for the apartment … you have to be creative,” she said.
Ms Sassoon warned tenants that some properties that were still desirable did not automatically warrant a rent reduction.
“Some tenants are really taking the mickey and playing the game and I think that’s really unfair … It is the crappier properties which are difficult to lease, that’s why they’re getting cheaper rent.”
Sydney renter Genevieve Turner moved from Redfern to Chatswood, into a unit that had its price slashed from $620 to just $535 a month ago.
“The biggest thing which takes my wage is my rent … I really did not expect to get a nearly $100 discount,” she said. “Previously, it was a little bit out of my budget.
“I notice properties which normally would not be available for a day are sitting on the market.”
The Rental Specialist principal Jo Netoli, who manages properties around the city and the inner west, said smart landlords would consider a rent reduction but warned tenants not to issue ultimatums when negotiating.
“Diplomacy always wins. Tenants and landlords need to remember that you’re in a relationship but it is a business relationship — you have both got to work together to achieve outcomes,” she said.
She said tenants should provide examples of similar properties at reduced prices and be prepared to sign another lease.
“In return for the reduced rent, the owner might want a bit more security themselves,” she said.