The Sydney residential property market has had a rocky few quarters, attributed mainly to buyers’ access to finance, oversupply of new apartments in certain areas & market uncertainty leading to poor consumer confidence.
However since the Election and the June interest rate cut, there appears to be a shift in sentiment and other potential good news around access to finance. Richard’s article here provides some valuable insights.
From a rental market perspective, the overall trend is a relatively soft rental market. National rents grew 0.4% higher over the past year which remained at their slowest annual rate of growth on record (data from 2005). Sydney’s gross rental yields hover around 3.5% (as at April 2019) with median apartment rents at $525pw and house rents at $600pw. However we are finding that across Sydney there are significantly differing markets between different areas. Areas where there is an oversupply of new stock are seeing falling rents and longer vacancy periods while sought after pockets closer to transport and amenities continue to prove popular with renters.
What does it mean for you?
Slowing rental markets, especially in Winter means more strategy and consideration is needed if there is a vacancy coming up. Sometimes vacancy can be avoided by negotiating with existing tenants, in other situations strategic marketing and flexibility is required in order to find a tenant quickly.
With another potential rate cut around the corner, it will be interesting to see if this continues to buoy the residential sales market and its flow-on effects into the rental market.
Please contact us if you would like a rental appraisal/review or finance review.
Sources: CoreLogic Housing Market Update; Rent.com.au Rental Market Snapshot – May 2019; Realestate.com.au Property Outlook