Plenty of our recent resume and business clients are on JobKeeper. Some are getting financial relief through rent pauses. This is a good news story for them – but not landlords.
Tenants are in a better position to demand lower rents than they have been for years as the devastating impact of the coronavirus crisis leaves landlords desperate to fill vacant properties for “whatever they can get”.
Economic uncertainty, rising unemployment and closure of the international border due to the pandemic are putting pressure on the housing market.
Figures released on Wednesday showed that rents for houses in Sydney have fallen to their lowest point since 2013 thanks to the Covid-19 triple whammy of economic standstill, lower migration and a flood of former Airbnb lettings left empty by the wipeout in the travel industry.
It now costs on average $646 to rent a house in Australia’s biggest city, according to the latest figures from SQM Research, the cheapest level since 2013 and a 6.5% drop from a year ago. An average unit is $480 a week, the lowest since since May 2015.
Scott, a tenant who was looking to upgrade from his one-bedroom apartment in Rhodes in Sydney, managed to secure a 15% reduction in his rent from $540 to $460 a week after noticing that the asking price was falling in many apartments in his area.
“I was upfront with the real estate agent about the situation,” said Scott, an IT manager. “I linked them to various apartments within the same complex in the $450-480 range before reaching an agreement of $460 on a 12-month lease. It took about four rounds of negotiation to get to that point – the owner was in denial for a few weeks about the state of the rental market in Rhodes.
Jade Costello, co-founder of the agency Melbourne Rental Search, said she was seeing something “we’ve never seen before” with landlords willing to negotiate on the price upfront.
“You might see somewhere for $500 but the landlord will be willing to drop it because they just don’t want places to be vacant,” she said. “It’s a tenant’s market for sure. They are going in with the rent they want to pay and landlords and agents, who used to have so many potential tenants to choose from, are saying whatever we can get we will take it.”
In the latest sign that prices are under pressure, the research firm CoreLogic said on Wednesday that it was suspending the daily online publication of its closely watched index of house values due to the Covid-19 crisis.