Falling rents, interstate migration, Sydney Investors new headache?

Sydney rental reversal: falling rents, rising vacancies as landlords hang on

 

Um... I have not been in the rental market for a while but, why, of all suburbs, Surry Hills is the example?

 

Its not just surry hills,
Interstate migration is getting real,
As the vacancy rate rises across sydney 'downward rental pressure' will only be increasing.This along with the headwind of 90,000 new dwellings hitting the market in a year or two will continue the downward pressure on rentals..

 

I thought the rental market would have a bit of a natural slowdown with peak supply levels coming online. I'm surprised that the article is attributing higher vacancies mainly to the demand side of the rental market. It doesn't really comment on recent changes to the population macroeconomics, so its hard to say that net interstate migration is causing a rental vacancy pickup.

The general population story for sydney over the last few years has been:
1. Population growing fast then usual. This is a general Australia story (with Melbourne going at rapid rates relative to the developed world).
2. More sydney siders leaving but more overseas migration coming in. Sydney has long had Sydneysiders leaving and overseas people coming in, so its not a particularly new story and not the main factor driving rental market vacancies.

Makes complete sense too. Its expensive and you don't get bang for buck here. If you don't need the higher income or are not Sydney income dependent, standard of living wise doesn't make sense to be here.

 

'Tipping point':

'Tipping point': One in 10 spending more than their income

 

It must be an accumulation of things,

• more interstate migration then usual due to
  cost of living, standard of living, daily commute time (imagine spending 3+ hrs daily just on commute) etc
• Migrant intake under pressure across australia due to recent tightening of vetting process.
• increasing new supply with around 90k new dwellings to hit in next two yrs.
• increasing shared accommodation?
  
  Migration numbers slashed after crackdown

 

Very nice post @TheSackedWiggle the data below is very telling.

I lot of people kept telling me that I was very negative about Sydney...there was a reason for this...one was the crazy prices in Sydney which was unsustainable. The other was that the population growth in Sydney has slowed to the point there is now a looming oversupply of units/houses. The fact that the better suburbs are getting hammered is telling... some on this forum spruiked that places like Bondi, Tamarama, Surry Hills won't get hit..it is now filtering out that way big time.

Watch for serious bargains in Sydney in the next 2 years....I can see prices now pull back to 2015..prices....

Melbourne is also facing a similar issue but limited to the top end...the outer suburbs are flat lining...and surprisingly not dropping as much as Sydney. That is probably due to rents still being affordable around the 300-400pw mark ..where in places like Marsden Park/Schofields/Rouse Hill it is something like 550-700pw. The wage between the two cities are very similar.

 

[/QUOTE]

Why do you think that is sash? Is it because Melbourne's outer suburbs are much more affordable that Sydney's even at peak?

Do you think they will hold up long term?

 

Why do you think that is sash? Is it because Melbourne's outer suburbs are much more affordable that Sydney's even at peak?

Do you think they will hold up long term?[/QUOTE]
Yes...because Melbourne's rents are far more affordable in certain locations...whilst prices have increased significantly the rents have not. This is now causing rents to go up as investors are thin on the ground.

Sydney is more exposed as there is migration away from it .....

 

Another reason to leave is your health:

(Adelaide No. 1 ranked city in Australia, 8th globally).

Healthiest Cities in the World 2018 by Spotahome

"We make decisions that affect our health every single day. Whether they’re related to food, sleep or exercise, these small choices shape the way we feel about ourselves. But there’s one key thing that we forget to consider: the city that we’re living in."

 

Yeah thats true, quality of life should improve health. Nonetheless IMO, Sydney is a pretty amazing place to live too when considered from a global context. IMO most Aussie cities eclipse the rest of the world for a 'place to call home' and 'quality of life'.

 

Top 10 cities for quality of living
Rank – City – Country

1 – Vienna – Austria

2 – Zurich – Switzerland

3 – Auckland – New Zealand

4 – Munich – Germany

5 – Vancouver – Canada

6 – Dusseldorf – Germany

7 – Frankfurt – Germany

8 – Geneva- Switzerland

9 – Copenhagen- Denmark

10 – Basel – Switzerland

10 – Sydney – Australia

 

Interesting the higher density increases livability and amenity.

Would believe it really



109/508 Riley Street Surry Hills NSW 2010 - Studio for Rent #424373154 - realestate.com.au

You can get yourself a 1 bedroom with courtyard apartment in Surry Hills for $500

Not bad how much would 1 bedroom apartment this size in Manhattan cost. Its a walk to work .