A quarter of Sydney and Melbourne properties rented at a discount in May

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on June 11, 2020
A quarter of Sydney and Melbourne properties rented at a discount in May

Photo by Maximillian Conacher on Unsplash

Yesterday Domain reported that in May 2020, 27.7% of Sydney and 25.3% of Melbourne properties were rented at a discount.

This actually represents a percentage fall in the discounted properties rented from April.

In April, that figure was nearly 30% for Sydney and more than 27% in Melbourne. 

However, it should be noted that rental volume was generally much lower in those months, and the news comes after many states introduced various 'no eviction' rules during COVID-19, while short term holiday lets also flooded the long-term market.

See also: Should you find a new place to rent during COVID-19?

As late as February right before the pandemic took off, in Melbourne the rentals offered at a discount were as little as 15.5% of the market, while in Sydney it's remained above a fifth.

Solely going by Domain's research, the toughest capital city to have asked for a discount in May would have been Adelaide - just 12.6% of rental properties were discounted there.

Brisbane and Perth were also fairly tight, at 16.6% and 16.2% discount frequencies respectively.

As for particular areas to fancy asking for a discount, in South and West Hobart in Tasmania more than a third of rental properties were rented at a discount in May - up from just 13.5% in February.

In inner Melbourne that figure was also 32.2%, up from 15.7% in February.

A scan down the list reveals a few 'usual suspect' holiday letting areas - such as the inner city, and 'Gold Coast East' in Queensland at 20.9%, up from 11.8% i.e. Surfers Paradise and surrounds.

Areas and suburbs must have had a minimum of 50 properties rented to qualify.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of January 18, 2022. View disclaimer.

How much can I negotiate off rent during COVID-19?

As for how much of a discount renters are getting, SQM Research reported that in the rolling month ending 4 June, in Sydney, houses saw a 1.4% slide in rental prices for a median rent of $643 a week.

For units, that discount was just 0.4%, for a median rent of $478.10.

On the year, these figures represent a 7.0% and 5.1% slide in rental prices respectively.

In Melbourne, for both houses and units the slide over the month was 0.5%, with a 1.4% annual slide for houses, and 4.3% for units, for a median rental price of $532.30 and $405.90 respectively.

Elsewhere - Australia is bigger than Sydney and Melbourne - the discounts weren't as large, if they were discounted at all.

In Brisbane, for example, prices increased over the month - up 0.6% for houses, and 0.4% for units, for a median weekly rental price of $460.70 and $377.80 respectively.

Across all capital cities over the month, rental prices slid just 0.4% for houses and 0.2% for units.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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