Landlord sell off to hit renters hard

Long attacked by many as the reason for the rental crisis, more landlords are exiting the real estate market than usual which spells bad news for renters.

The latest report on vacancy rates across the capital cities saw just the slightest shift in March, as conditions remain stubbornly tight for renters.

The March vacancy across the combined capital cities was at its second lowest level on record, with just 1.08 per cent of rentals sitting vacant according to PropTrack.

Its 1.07 per cent status in February was the scarcest proportion of properties available for rent historically. It started the year at 1.2 per cent.

Sydney’s vacancy rate eased slightly to 1.16 per cent in March, while remaining well down from a year ago.

Recent rental offerings do reflect big gains, including a one-bedroom Missenden Rd, Newtown, apartment listed at $690 a week having been at $570 in May 2022.

There was a three-bedroom unit at Olympic Park seeking $900 a week having been listed at $710 in early 2022.

More landlords are selling their real estate investments than usual, so renters will continue to experience heightened competition to secure shelter along with increased rent costs. Picture: NCA NewsWire / Flavio Brancaleone

A three-bedroom house in Seven Hills has been listed at $640 a week which was up on the $580 a week sought in March last year after it had been sold to an investor for $1m.

However, not all rents have rocketed.

There was a recent two-bedroom, one-bathroom, Wylde St, Potts Point apartment listed at $850 a week, which had been listed at $785 in January 2020 before Covid.

And a luxury, one-bedroom Bennelong Apartments offering at Circular Quay has seen its asking rent fall from $1700 a week in May last year to $1650 when offered last month.

LANDLORD SELL OFF TO PUT BIGGER SQUEEZE ON RENTERS

But undoubtedly the overall dire situation is set to continue as strong population growth combined with the ongoing shortfall of new home builds continues. And more landlords are selling their real estate investments than usual.

So renters will continue to experience heightened competition to secure shelter along with increased rent costs.

The total number of rental vacancies Australia-wide now stands at 30,000, according to Louis Christopher at SQM Research, with 8100 in Sydney.

Just before the 2020 pandemic there were 72,000 vacant residential properties Australia-wide with 22,000 in Sydney.

Even new apartment stock is getting pricier.

Urbis recently reported the median rent for new apartments across the nation increased by three per cent in the 2023 December quarter, finishing the year 16 per cent higher than a year earlier at around $655 a week. The property analysis company noted as delivery of new supply continues to fall below the long-term historic average, the median rent will continue increasing as demand exceeds new supply.

As population growth continues amid record low vacancy rates, tight rental markets will stimulate rental growth for landlords, Urbis advises.

That is unless the economic environment worsens with unemployment increasing which would see demand shift to lower priced rental stock, holding back rent growth.