The downtown rental markets appear to be the hardest hit by the COVID-19 outbreak, as the number of vacant homes continues to rise, according to CoreLogic.
Although there is a general tightening in Australian rental markets, inner-city regions continue to see a significant increase in rental stock, which, as a result, puts downward pressure on rental stock. rents and rising vacancy rates.
Figures from CoreLogic show that of the 88 SA4 regions measured across Australia, 10 regions have withstood the downward trend in listings amid the pandemic. SA4 regions, as defined by the Australian Bureau of Statistics, cover a population of up to 300,000 in regional areas and up to 500,000 in metropolitan areas.
Most of the SA4 regions with growing lists are in Melbourne and Sydney. The Melbourne interior region saw the highest gain in total rental listings, up 52.3% since the start of the COVID-19 outbreak in Australia.
"The dominance of Sydney and Melbourne in increasing rental supply highlights the localized nature of the rental demand shock that has been observed since the start of the pandemic" said Eliza Owen, head of residential research at CoreLogic.
Considering the increase in listings, the 10 SA4 regions saw median asking rents declines of up to 10%, with the City of Sydney and the Southern Interior region reporting the largest decline .
The table below shows the growth in total rental listings in the 10 SA4 regions from the onset of COVID-19 to the latest data taken in the month to August 9. The table also shows the magnitude of the decline in median asking rents.
Owen said that international border closures have contributed significantly to the increase in rental listings in downtown areas.
“Indeed, the majority of new migrants to Australia are renters, at least initially. The 10 SA4 regions that experienced an increase in rental listings between March and August together accounted for 29.1% of the migration net to Australia. during the year until June 2019, "she said.
Another factor contributing to this increase in rental listings is the recent surge in tower building activity. Demand for housing, which has continued to be affected by weak labor markets, has not been able to keep up with the growing supply of rental housing.
<< Due to the relatively high level of investor concentration, particularly in the inner city apartment markets, rental supply and demand trends indicate further downside risk for values ??in these neighborhoods until international borders reopen and labor market conditions tighten. Said Owen.
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