The number of rental properties sitting vacant in Sydney have continued to surge, new figures show, putting pressure on landlords to cut rental prices.
Almost one in six rental properties in Sydney's CBD (16.2%) were vacant in May.
Sydney's residential vacancy rate is now the highest in the country and the highest on record since 2005, according to SQM research, rising to 4% in May.
There are now over 29,416 rental properties sitting empty across Sydney - the result of a decline in international students and holidaymakers with Airbnb rentals becoming available on longer-term leases.
Melbourne's vacancy rate also increased to 3.1% in May, while Canberra jumped by 0.1% to 1.3%.
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.
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 08 July 2020. View disclaimer.
Despite the spike in vacancy rates in Sydney and Melbourne, the national vacancy rate has actually slipped.
The national vacancy rate fell marginally from 2.6% in April to 2.5% in May.
Adelaide (1.2%), Hobart (1.2%) and Brisbane (2.5%) dragged down the national vacancy rate.
SQM Managing Director Louis Christopher said we may now be hitting a short-term peak in vacancies.
"Weekly rental listings suggest a slight decline in supply for the first half of June. I think what is happening here is AirBnb property owners have now pulled back from listing long term and are now waiting this time out in the hope that the borders will be open shortly," Mr Christopher said.
"However, with an expected 170,000 dwelling completions for this year and still no imminent opening of the international border, I still think rental vacancy rates are going to remain elevated for 2020.
"While First Home buyer grants may assist in soaking up some of the new supply, let's just remember the bulk of underlying demand growth in recent years has come from net migration. Also note that many first home buyers are tenants."
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
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.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*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.
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