Record number of Sydney homes are now sitting empty: SQM
Sydney tenants are now in a strong position to get a discount on their rents following a record surge in the number of empty homes, with one region offering particularly good deals.
Tenants will be in a strong position to renegotiate their rents following a record surge in the number of Sydney rental properties sitting vacant.
Figures published today showed nearly 8000 homes became empty over the past year, pushing the total number of vacancies to a record high of 23,837 in April.
The increase meant 3.4 per cent of all Sydney rentals were without a tenant compared to 2.3 per cent at the same time last year, according to the SQM Research data.
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SQM Research director Louis Christopher said the increase in vacancies was the result of increased home building and a drop in the number of renters seeking homes.
“Tenant demand has been weak over the course of March and April,” Mr Christopher said.
“That, combined with the expectation that dwelling completions are at their peak, prompted the rise in rental vacancies.”
Vacancies were concentrated in areas where there was rampant housing construction.
This included the Hills region, where developers have been releasing a slew of new housing projects in anticipation of the opening of the Sydney Metro Northwest train link this month.
The increased home building pushed the Hills vacancy rate up to 5.8 per cent, according to SQM Research.
Nearly 5 per cent of lower north shore rentals were empty, while on the upper north shore it was 4.5 per cent.
The vacancy rate in the Sydney CBD was 5.4 per cent, while in the Liverpool region, where numerous unit projects have been released in recent years, it was 3.2 per cent.
Mr Christopher said more Sydney homes would likely become empty as the year progressed.
“Going forward we expect rental vacancy rates will further rise in Sydney and Melbourne for most of 2019, before peaking and falling in 2020,” he said.
More housing stock would become tenanted once building activity slowed down, Mr Christopher added.
The rise in the number of homes sitting without a tenant suggested landlords would not be in a position to increase their rents.
Many would instead would have to adjust their prices to make their properties more enticing for the current tenant pool.
CoreLogic figures showed rents in the suburb of Kellville, a construction hub in the Hills area, dropped nearly 8 per cent over the past year, a fall equivalent to about $50 per week.
In Epping, another construction hot spot, the median rental price of a house dropped just under 6 per cent, or about $40 per week.
SYDNEY REGIONS WITH MOST VACANCIES
The Hills 5.8%
Sydney CBD 5.4%
Lower north shore 4.8%
Upper north shore 4.5%
Liverpool 3.2%
Originally published as Record number of Sydney homes are now sitting empty: SQM