Rental Reductions - New Leases

Hi folks, I'm very aware there's already a thread regarding rental reductions investors/landlords have given or had requested of them, from EXISTING tenancies.

But I'm keen to hear from investors/landlords who've had a tenant turnover during covid or at present, had to relist the property for rent for a new tenant; and any implications on their rental pricing.

According to this article:
Sydney renter reveals how to save on rent during pandemic

Some cities have fared better than others in terms of having less rental asking price reduction than others.

So with that, interested to hear from investors around the country on localised experiences.

As for me; in AU I'm yet to have a lease renewal come up or a vacating tenant and the need to advertise a vacant rental. Anecdotally in the US I did have a tenant vacate in July but turned the place around within a fortnight for - and this gobsmacked me - an INCREASED rent rate.

 

I think it would be VERY dependent on where the property is and the demand for that type of property in that area. Some areas have been hit badly, others are booming.

Eg on the Sunshine Coast the vacancy rate is 0.1% or something. Community notice boards filled with people begging for a rental, for anything. Landlords could raise rents and def still get tenants. Sydney CBD would be a very different story.

 

Exactly. I'm hoping to hear real life anecdotes on this thread, about this.

 

Deception Bay Brisbane my client had about 40 people through in one open home. Multiple applications. 4 bed 2 bath house. No issues with houses in Brisbane.

 

Harris Park teanat vacating to move closer to work. Rent was reduced signficantly 18 months ago when they moved in. May have to reduce again - 5% vacancy rate.

wattle

 

Numerous cities/towns in Australia are experiencing historically low vacancy rates and thus rents are increasing not decreasing (quick Google search if you're further interested).

So it's always useful to research at a granular level within a quantitative framework.

On that note, I'd imagine high density apartments in some areas of Sydney, Melbourne, Brisbane and Hobart are experiencing rent declines whilst houses in some areas of the same cities would actually be experiencing rent increases.

 

Innerwest Sydney:

I vacated a property in May and it was relet at an 18% reduction, the property I moved into a couple of streets over I signed for a 23% reduction over what the previous tenants were paying.

Both 2 bed / 1 carpark units in small lowrise complexes.

 

In Sydney properties where there have been high student and tourist populations have taken a hit but other areas are quite similar to before. Properties I've rented out in Blacktown and Castle Hill recently are as popular as ever. CBD on the other hand has hundreds of vacancies.

Actual examples: In Bondi we just rented a 2 bed unit on a 9.5% discount with some new paint, Glebe we rented a 2 bed house on 6% discount, Petersham we rented a 2 bed house at the same rent. It really varies depending on each area and the type of property.

 

Negotiated a 12.5% discount with our landlord, to sign for another 12 months.

2/1/1 inner Sydney

 

Sounds like you are doing well. Mixed bag for me.

Inner north melbourne 2 bedder flat 10% lower to keep tenant 405pw.

I am pretty happy considering the diminished tenant pool. It is still confusingly doing better than 370pw we get on our decent 3 bed house in rosebud (perhaps time to jack that up) and wife's south morang house leased for 400pw, 28 applicants in first week.

Shows you how elevated inner rents were in Melb despite the oversupply of apartments due to the 200k students, and millions of annual tourists and temp visas sloshing around.

 

Brisbane proper seems to be doing well. Property was rented the week tent ants moved out (North Brisbane). Sunshine Coast is doing very well as well.

City apartments another story.

 

Middle ring (20km from Melbourne PO) south eastern bayside suburb. $490 per week. 3bdm /2 living/ 1 bathroom.

Vacated in late July. Tenants signed up the same week. Moved in August. Vacant 2.5 weeks. No rent reduction requested or given. Rent not increased either, though.

 

Update from me: Inner West Sydney ('outer' inner west say 8-9kms from central) tenant placed. 2/1/1 old walk-up 60s unit. $320pw rent. Previous rent was $380pw.

 

I actually on the other hand had rent increases for the following properties:

Singleton house - $340 > $350
Marayong townhouse - $420 > $450

The rest of my regional NSW and QLD properties have not been affacted so no change.

It appears the regionals are holding up nicely, the main affacted area seems to be units in metropolitan.

 

I know I know this source is News.com.au... BUT the story contains some useful charts on rental declines across major cities:

Savage change in Australia’s housing market

I'm sure each suburb has its own localised variances (either positive or negative); but on the whole it's pretty dire (except for Perth!).

 

Granny flat increased by $10 to $400 Liverpool area.

 

3 bdr house in Cranbourne, Melbourne. $360/week same as before.

Found new tenant within the first week. Haven't seen any noticeable reduction in rent for houses in Cranbourne.

I have friends with ip 2 bdr apt for rent in Melbourne cbd and south Yarra. They had to reduce rent by approx 15-20% to get a new tenant. Took them 4+ weeks to find a tenant.

 

Mixed results, and mixed timing. Sydney west:
May - I dropped $40 /week on a walk up Merrylands unit to get a tenant and minimise vacancy (leased the same day).
September - tenant broke lease on a St Marys townhouse, re-let at the same rent, new tenant moving in at the point the rent was paid up to.
It’s hardly dire.

I work as an agent in The Hills, I work in sales but see the rental enquires come through - we currently only have 1 vacancy & multiple enquires per day.

My hypothesis ... a fair bit of the void left by tenants leaving the market is being filled by
- those who previously shared and now want to live alone,
- and some separations after couples have been locked up together for months and realise they can’t live together anymore.

 

I negotiated a 15% reduction on the house where I currently live (North Shore Sydney) due to the impact of COVID-19 on market rents (not a hardship reduction). Moving to a recently purchased PPOR and the house has been readvertised at the same reduced rent.

 

Wolli Ck, had a tenant leave in May following 15% rent reduction due to job losses. Was able to relet within a week for 12 month contract for original rent. Extremely happy with this outcome