We have begun to see the rental market cool on the Northern Beaches over the past 6 weeks. Vacancy rates across Sydney have increased for April/May – currently at 4.3% for Sydney Total (estimated 2.6% for the Northern Beaches according to REINSW).
I believe we have seen this cooling of the rental market due to four main factors – Seasonal change, fewer lock-downs, closed international borders and a strong housing (sales) market.
Seasonal change is something we are accustomed to on the Northern Beaches – people want to be here for summer lifestyle, so fewer people are looking to move over the cooler months.
Fewer lock-downs might sound strange, but we found after the initial Covid-19 lockdowns there was a strong migration to the beaches – where else would you want to be stuck? It’s a great lifestyle here, and if you need to be restricted to an area – this is the place to be…
Also with people working in the CBD again, inner-city suburbs might be more convenient.
Closed international borders – As you can imagine, international students, workers and travellers make up a large percentage of tenants in Sydney – the RBA has suggested we will have 400,000 fewer residents by June 2021 – the majority of these residents rent.
Finally, the strong housing market has an impact on rentals as tenants are making the move to own – money is cheap, prices are increasing, which also gives investors confidence to jump back into the market – which means new rental properties also hitting the market – increasing the vacancy rate.
Whilst we are seeing the market cool a little, it is still doing very well here on the beaches – particularly compared to the rest of Sydney.
I believe over the next couple of years we will see a surge in rental prices. As property prices become higher many residents will be priced out of the local market, being forced to rent in this area, whilst maybe investing elsewhere.
We will also see a huge increase in rental demand when international borders open.
Ben Benny – Property North Agency