Sydney rental vacancy highest since 2005

there is or even more supply coming for units. but how much will this actually create downward pressure on houses. Understand little bit it will - but with so many streets being super filled with high rises, noise, parking problems. would houses 1 kmh away in quite street attract better tenants and be in demand as well

 

Good points, though in contrast did you see the jobs results for WA? Huge loss in NSW, but huge gain in WA. I'm thinking even if Australia or NSW see a recession, Perth may really have turned a corner this time.

 

Didnt seem that long ago that NSW had an unemployment rate of 3.9, nows its climbed up to 4.5% in 6 months ,with more job losses.
Obviously not good news when factored in with an oversupplied property market.

 

Wow!!!.....$545 in the CBD......its muy loco...in the rental market in Sydney!

 

Cheap rent in nice and central apartments means higher vacancies for "regular" houses where the asking rents are much higher. When rental vacancies rise and yields drop, the pain of holding large mortgages will bite and that translates to the need for deleveraging. The good old supply and demand. No city is immune to this. Subdued demand at the same time as increased supply is simply no good. Period.

Ofcourse, the tide will eventually turn but quite unlikely in the next 12 to 24 months. Besides, the last sideways stint for Sydney only lasted about 10 years.

 

Not just the upcoming oversupply of new stocks in next two three years,
I think many are also discounting the catalyst role played by external Chinese money during 2012-15 esp in syd/mel, and their absence this time around due to mainlands strict restrictions on outflows.

 

Is a nice one bedder too. New carpet. Minor view of Hyde park. Very quiet. Not adjacent to Street.
Still more falls to come especially on apartment rent.

 

Tallies well with the resi property building boom ending don't u think? Tradies and other workers in related sectors lose jobs as work dries up and companies have to reduce headcount. Probably plenty of REAs and sales people as well. Which will filter through the rest of the economy...

 

Last night, overheard a small businessman, tradesman & an office worker- talking about slowing 'real' economy. This robotics engineer is told to take a day off every week & hence working 4 days office. He told that their domestic & export sales came down to almost half. He was strong believer in debt to the eyeballs & was heavy 'specufestor' in the past.

 

I think the drop in interest rates have more than offset any rental decreases.

For what it's worth, a week ago I had new tenants move in for a place I own in Sydney. I was thinking of selling it (so I had the previous tenants move out after their lease finished) but I ended up deciding to hold it because:

1. I still really like the place, it's a townhouse in a quiet complex. There are approx 130 of these townhouses, approximately half are 2 bedders, others 3, but only a very few are put on the market for sale, like 2 or 3 per year.
2. It's well located and low maintenance imo, strata is good, mine has nice leafy outlooks front and back
3. I realised how good the bus services are servicing the location is, and also it's very walkable to a Coles and a reasonably large strip of shops
3. An upgrade to the Bankstown train line to convert it to metro in a couple of year's time will be beneficial for this area
3. I realised when looking at a bank statement I had been on P+I and actually had paid off 10k of principal in the past few months.
4. Interest rates have come down another 50 basis points!

I had one Saturday open, and tenants moved in the following Saturday. As I'd done little fixes and put in new carpet (the place needed it) after the previous tenants moved out, I increased the rent by $10/week.

Sure, perhaps some properties in Sydney are struggling to attract tenants, but many arent.

 

It sounds like you've got a solid place there. And of course most of Sydney can attract tenants especially homes in desirable areas with good transport.

Was the $10 increase on 12 months earlier? I would've thought new carpet would increase the rent by more than that especially if you say it needed it. If a nice place barely increases the rent when it has some money spent on it then dime a dozen apartments that have a massive oversupply are likely suffering badly.

 

Well, I've owned the place since 2010, and the existing carpet was definitely not new back in 2010 either. The place is carpeted only on the upstairs level and on the stairs, downstairs level is tiled.
I possibly could have put the rent up a tad more, who knows. But i'm happy.

 

Gockie, you are not a good representation of the many a buyer that bought in the tail end of the boom, over-leveraged. Interest rates did come down a bit but not a whole lot. Many were IO back in the day.

A fair few investors will feel short term pain, nothing unexpected here during a correction phase. Doesn't mean all investors in Sydney will get hurt and is no different to anywhere else.

 

We have an apartment that's currently leased for $950

 

I think this is the secret to buying units and townhouses - you must buy one of the “better” ones in the complex, that has major appeal to tenants. A quiet one with a leafy outlook will appeal to most.
Marg

 

Unemployment under 5% is not necessarily ideal. As with everything, it's just a number. Traditionally, around 5% has been seen as a good balance.
Not saying what will happen either way but we're not in danger-zone with jobs yet, nor anywhere near it.

 

I don't think anyone is discounting it, which is why laws were belatedly but effectively put into place. Seems you're hanging out for house prices to go massively up or massively down - won't affect you either way. You're gonna get huge eating all that popcorn.

 

Thought I’d throw in my 2c here as I’ve just come out of an interesting situation :

- Renting room in North Bondi for $350per week
- Art Deco Apartment on ground floor with no sunlight
- Can’t leave windows open as it had no grill

Recently checked out the rental market and noticed a huge fall in the Eastern Suburbs. Found a waterfront apartment in Darling Point which had a water view from every window. Asking rent was 650 but I was able to negotiate down to 600.

Moved in over the weekend. The apartment one floor below with same layout just sold in Feb for $1.37 million (1bdr)

How far can negative gearing go..

 

Something to consider is your apartment may have been owned by some one for 15 years?

If so they may have paid 500k who knows. If you disclose address any one will tell you when it was sold for what amount. Than you have to ask why is it in the rental pool. Maybe country parents baught an apartment for child to live in when they go to uni? Again I don't know.

But how did you draw the conclusion of the sold apartment downstairs to your apartment which is not the same owner?

 

My apartment last sold in 2004 for $650K so the owners here should be alright with the rental yield.

However the current asset to rental rate would be superbly low.. $1.37mn apartment renting for $600pw?!