Once again we’ve found ourselves in lockdown and the reality of living through the ebbs and flows of a pandemic has seemingly become second nature. Amidst the pandemic, our booming property market has spilled into the rental realm, with the total number of properties vacant is plunging across Sydney, especially in the Lower North Shore.
While last year’s lockdowns invoked unknown territories for the property market, the sentiment this time around has changed. We’ve adapted to a new way of working and living, and rather than moving out of fear, prospective renters are flocking to the Lower North Shore and moving out of desire.
However, combined with the recent announcement by the NSW State Government of a rental moratorium, which includes a 60 day ban on evictions for tenants who lose at least 25 per cent of their income, this lockdown has seemingly confounded our buoyant market.
A duality in the investor market has emerged. Active investors are reaping the benefits of enthusiastic renters, while idle investors are missing out.
Contrary to adverse inner city and eastern suburbs rental markets, which rely heavily on international students, vacancy rates in the Lower North Shore are dwindling fast.
While we are spending more time at home, living expenses that were originally geared towards overseas holidays are now being invested into the total lifestyle at home. With that being said, there is no shortage of decisive renters in the Lower North Shore as tenants are willing to pay more for destination locations.
Upgraders, downsizers and returning expats are continuing to flood our rental market with fervent desires for large open living areas, separate study spaces, ample light and beautiful balconies.
The already rampant demand for a ‘rental upgrade’ has been accelerated by the recent lockdown. For instance, in the first 14 days of the financial year, we’ve had 582 enquiries for rental properties versus 719 for the previous month. That is already at 80 per cent of the total enquiries for June.
Deluxe two-bedroom and three-bedroom apartments in desirable lifestyle locations are extremely sought after among renters. Increased demand and shortage of stock bodes well for active investors with house rentals prices increasing by around 5 per cent in some suburbs.
Investors began to jump back into the luxury market this year with strong capital growth opportunities, low interest rates and vibrant rental market promises.
However, the current COVID-19 lockdown and news of the rental moratorium has purportedly perplexed investors, with many hitting the brakes on listing their rental properties.
Rental listings across the Lower North Shore have declined substantially in July. An average of 50 properties listed online per week has noticeably dropped to just 25. Compared with the amplifying demand for rental properties – it’s an incongruent market.
While remote and flexible working remains a semi-permanent reality in this pandemic, Lower North Shore investors risk missing out on property leases and precious yield if they remain idle.
Contrary to newspaper headlines of the Sydney rental market tenants are out there, and they are ready to move.
While lockdown restrictions on open homes have shifted to private property viewings, a trend has emerged. Rather than moving rental properties out of panic as we saw in 2020, tenants are moving exponentially faster and taking advantage of lockdown to acquire luxury rentals.
Videos of rental properties have transformed the way renters are selecting properties. Accelerated by COVID-19 and the digitisation of real estate, they’ve created a personalised property viewing experience.
After browsing online, tenants are more decisive. According to the Digital Inspections Consumer Survey by the REA Group, 83 per cent or prospective renters believe that a virtual tour helps them better shortlist rentals, while 86 per cent of people are more confident to request a physical private inspection after seeing a video.
As a result, this online due diligence is driving pre-qualified private property viewings and applications are flying in fast. Renters are decisive and rental deposits are being paid in less than 24 hours from first viewing the property.
This isn’t the horror story many have been led to believe.
Work out a strategy for your investment property with Michelle.