Rental prices set to remain stable after lockdown according to expert

A silver lining for renters following last year’s lockdown was a dramatic fall in prices. But experts have predicted quite a different outcome to our current lockdown.

A huge shake-up to rental prices across the inner suburbs of Sydney is unlikely to repeat itself in the aftermath of the city’s latest Covid lockdown, according to a real estate expert.

The number of rentals sitting empty across the inner suburbs of Sydney spiked following lockdowns and the height of the pandemic last year.

Almost 6 per cent of rentals sat vacant in June 2020 which was more than double the number of vacancies at the start of the pandemic (2.5 per cent in March 2020).

Bondi in early 2021. Picture: Christian Gilles

That spike resulted in a renters’ market and saw many people shop around and snap up cheaper rentals – commonly saving over $100 on weekly rent.

However, the figures have improved during the past 12 months and the vacancy rate in the inner suburbs of Sydney dropped to a relatively low 3.3 per cent for May 2021.

Real Estate Institute of NSW chief executive Tim McKibbin said the latest lockdown was unlikely to cause another large disruption to the rental market.

“I’m not sure this particular (lockdown) is going to have this affect,” Mr McKibbin said.

“People are coming back to the inner city.

Real Estate Institute of NSW (REINSW) CEO Tim McKibbin.

“If we come out of the lockdown on July 9, as we are all hoping, we will go back to where we were a fortnight ago.”

He explained what happened to the rental market last year, following the height of the pandemic, was many people opted to move out of expensive rentals in the inner suburbs.

“The inner city became unattractive because it was more expensive.

“People said if I’m going to be locked down I may as well do it somewhere cheaper.”

He added a huge influx in expats returning home to Australia had played a part in vacancy rates dropping again this year including in the inner suburbs.

Crowds gather to inspect a Sydney rental pre-Covid. Picture: Angelo Velardo

“There could be a few reasons behind it such as attractive rents, more people are slowly returning to the CBD to work or the influx of expats renting properties while looking to buy.

“It is good news for those with investment properties and an improvement from the peak 5.8 per cent vacancy rate (in the inner suburbs of Sydney) recorded back in June and October last year.”

Meanwhile, in the outer suburbs of Sydney, the vacancy rate for rental properties during May 2021 was 2.5 per cent. That was similar to the vacancy rate during the same month last year in the outer suburbs (2.7 per cent).

In the middle suburbs, the vacancy rate for rental properties during May 2021 was 4.6 per cent, exactly the same as the corresponding month last year.

See below for a breakdown of what is considered inner, middle and outer suburbs. Vacancy rates for residential rentals in Sydney and wider NSW is published each month by the Real Estate Institute of NSW.

Percentage of residential rental properties vacant in Sydney (June 2020 to May 2021):

June 2020

Inner suburbs: 5.8 per cent

Middle suburbs: 5.2 per cent

Outer suburbs: 2.6 per cent

May 2021

Inner suburbs: 3.3 per cent

Middle suburbs: 4.6 per cent

Outer suburbs: 2.5 per cent

*Inner suburbs include the following LGAs: Ashfield, Botany Bay, Lane Cove, Leichhardt, Marrickville, Mosman, North Sydney, Randwick, City of Sydney, Waverley and Woollahra.

Middle suburbs include the following LGAs: Auburn, Bankstown, Burwood, Canterbury, Canada Bay, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Manly, Parramatta, Rockdale, Ryde, Strathfield and Willoughby.

Outer suburbs include the following LGAs: Baulkham Hills, Blacktown, Blue Mountains, Camden, Campbelltown, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Liverpool, Penrith, Pittwater, Sutherland, Warringah, Wollondilly and Wyong.