CoreLogic rent listings continue to show pain points around inner city markets

COVID-19 continues to show an acute impact on inner city rental markets, the latest CoreLogic data on rental listings has revealed.

In the 28 days to August 9, total rent listings on market across Australia had eased on the previous month, falling 10.9% nationally.

RentersWhile most regions are now seeing rental markets gradually tightening, there is still a significant uplift in rental stock around inner city areas, placing downwards pressure on rents and upwards pressure on vacancy rates.

A summary of the increases in rental stock by SA4 region is presented below.

SA4 regions are defined by the ABS as broad regions of 100-300,000 people, and are a useful area of measurement because of alignment with labour force data.

The increase in rental listings represents the change in the level of total rental stock counted in the 28 days leading up to the 15th of March, the week in which Australia recorded its 100th case of COVID-19, compared with that counted in the 28 days to August 9th.

Of the 88 SA4 regions measured across the country, 78 regions saw a decline in the volume of rental listings between these dates.

Focussing on the 10 regions that have seen an uplift in total rental stock, 8 were regions across Sydney and Melbourne, while inner-city Brisbane and the Adelaide Central and Hills have also seen an increase in rental stock.

The dominance of Sydney and Melbourne with regards to heightened rental supply highlights the much localised nature of the shock to rental demand that has been seen since the onset of the pandemic.

Eo Rent Listings

It is expected seasonally that most areas would see a decline in rental listings, as rental stock on market is usually highest at the beginning and end of each year.

For the four years prior to 2020, rental stock on market at mid-August has on average, been -3.2% lower than what is seen over mid-March.

However, the 10 regions that did see an uplift in rent listings are large rental markets.

Together, CoreLogic data suggests these regions account for about 27.6% of Australia’s total rent market.

More geographically granular data shows some of the highest uplift in rental stock is across Inner Melbourne and Sydney City and Inner South.

SA2 regions with the largest uplift in advertised rental stock are shown below.

Eo Rent Listings2

Across Southbank, rental stock has erupted from 568 rental listings in the 28 days to March 15, to over 1,200 by August 9th.

In the year prior to the pandemic, total rent listings across Southbank averaged 450 listings per month.

Interestingly, as Melbourne moves through its stage 4 restrictions, total rental listings have started to fall across most Melbourne regions.

RentInner Melbourne, which has seen the highest surplus of rental stock since the onset of the pandemic, saw total rent listings fall -8.1% over the 28 days to August 9.

A significant portion of this decline was a reduction of 450 new listings counted in the lead up to the 9th of August, suggesting new listings have fallen off the back of physical restrictions around letting property.

The regions with large accumulations in rental stock reflect many of the pain points that have come with the COVID-19 downturn, particularly more recent commentary which has highlighted the gaping hole in housing demand because of international border closures.

This is because the majority of new migrants to Australia are renters, at least initially.

The 10 SA4 regions which have seen an uplift in rental listings between March and August, together accounted for 29.1% of the net overseas migration to Australia over the year to June 2019.

Other factors contributing to the heighted level of rent listings include a recent history of significant supply additions via a surge in high-rise construction activity, while the demand side has been additionally impacted by the weakness in labour markets typically associated with renters, including food and accommodation as well as the arts and recreation sector.

These trends highlight some of the acutely impacted markets.

Due to the relatively high level of investor concentration, particularly in inner-city apartment markets, the patterns in rental supply and demand point to added downside risk for values in these precincts until international borders re-open and labour market conditions tighten.

icon-podcast-large

Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Eliza Owen

About

Eliza is head Of Residential Research Australia for Corelogic and a respected property market commentator. Eliza holds a first class honours degree in economics from the University of Sydney


'CoreLogic rent listings continue to show pain points around inner city markets' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts