Are the rents under pressure in Sydney?

The government really shouldn't even be approving apartment developments where you have to drive to go everywhere. It kind of defeats the purpose of medium and high density living

 

Have you actually checked for yourself?

I tried finding a 3br/2bth unit in St George area and seems like there are less for rent this year than last year.

Yes there are some newer style apartments but these are significantly higher in rent (eg $150-$200pw) than the old strata red brick style.

Seems like anything new brought in a higher price tier rather than driving down existing apartments.

 

Who has actually cut rents in Sydney? I haven't.

 

highest vacancy rate in 13 years, rents having to be cut.... this is from data provider based on thousands of properties..

https://www.news.com.au/finance/eco...p/news-story/ef7b985027421b12edc8512ebfd6ceda

 

But has anybody actually cut rents?

 

no one is probably admitting it on here

 

Nobody will cut rent until the tenants move out and the IP sits vacant. So the effect will not be immediate I think.

 

yes all it takes is vacant for a few weeks and makes good sense to cut quickly rather than have vacant.

 

It doesnt generally happen overnight , as most are sighed up on leases .
But when you go from a really tight market, there is a lot of political pressure to fix the problem, especially if people are saying high prices are due to supply issues.
The government reacts , makes the necessary changes to planning and approvals , and suddenly you get a building boom.
The big problems occur if population growth suddenly stops or slows right down as many of these projects are near completion, to make matters worse there is a lag time of 1-2 years once building has started, till completion.
They are then under pressure to sell or rent, and for many in the rental market they can suddenly rent a brand new pad for the same or a less than they are currently paying , that may be a 20-30 year old ******* that is in serious need of an renovation .
The older crappier places tend to suffer the most as rents suddenly drop and owners get caught offguard after years being in the driving seat, but suddenly are forced to try and entice renters to sign a lease.

 

Hey Gockie,
If it helps I have a real life example as a tennant, I am just vacating a rental property in Surry Hills - 2bed 2 bath 1 car. It was up $1000pw, we offered $900 and got it.
We are moving out to an apartment, 2bed, 2 bath, 2 car, surry hills again. Was up for $770, offered $680 on a 12 month contract.

We offered a few places below advertised price and nearly all were willing to drop prices so we had the luxury of choosing which w=one we wanted.

I noted that most places we were looking at the agents were all telling us the same thing that 'not as many people are coming to the inspection days' and I can confirm there may have been 1 or two people, sometimes no one. Some places have been on for weeks, sometimes no one is turning up to them a couple of agents told us. All this is in what would be deemed 'high demand areas' such as Surry Hills, Crown St and Bourke St area.

 

The rent is up to 100 dollars cheaper, but the size of the apartments (at least the new one's) are tiny.

The big issue for me is that the only road out is Bennelong Rd and Australia Ave which is a nightmare during peak hour. However, there is a free shuttle to Rhodes station now and of course there's always a ferry to the city.

They are also building a new shopping centre there, a new school recently opened.

 

and cheaper for waterfront or water views compared to other areas along the river

 

I'm noticing rents softening further in Sydney the last month or so, and not by a small amount - circa 5-10% decrease in rents compared to last year.

Be interesting to see how long this lasts before the (rental) market turns.

My estimation: 2-3 years if resi construction starts continue to drop. I can't see this sector increasing supply if market forces push prices of new apartments down. A lot of developers will consider projects unviable.

It's 2004 all over again.

 

Yes its starting have a look at Pennant Hills Rd at Carlingford. Houses they were leaving to disrepair are now all up for rent about 5 of them in a row. Huge site that now looks like will be left for some time.

 

I've recently had to reduce my rent for my townhouse, could have continued on with the current rent but decided to reduce and get a tenant in asap. More important to get a tenant than fight over abit higher rent.

 

Could this be on the horizon for Sydney? It's overdue.

Average rents reach all-time high of €1,304 per month

 

I haven't reduced but no increases this year.

I have good tenants in all dwelling so happy to keep them and roll over for another year.

 

No increases, no reductions, no vacancies for me so far in 2018

 

No vacancies and no expiration for our Sydney rentals this year so no reduction in rent. In two of our suburbs I notice the vacancy rate has actually decreased and asking prices have started to crawl up a bit for the last couple weeks.

 

I think conditions will be soft for a while yet, but as the supply pipeline diminishes..which is slowly happening, demand for rentals will outweigh supply.