Here is what’s going to happen to rental demand

Vacancy rates are set to rise sharply over coming months, with the rental market likely to be even harder hit than the new home market according to ANZ Bank’s May Housing Market Update.

ANZ explain that Money Parentsthe number of rental properties coming onto the market has increased sharply.

There are a number of factors leading to this according to ANZ including…

Short term rentals (Airbnb etc) are switching to longer term leases; potential vendors are withdrawing their properties for sale and listing them for rent; the overseas student market has dried up; and the sharp reduction in incomes is potentially driving younger renters back to live with their parents.

CoreLogic reports that rental listings have risen sharply, particularly in inner Melbourne (+36% in the month to 26 April) and Sydney (+34%).

As a result, advertised rents have started to drop in major cities.

Asking rents dropped 0.7% m/m in April, the largest monthly fall in the history of the series.

Alongside still-elevated levels of completions of new high-rise apartments, particularly in Sydney these factors suggest vacancy rates and residential rental yields will decline further over the next year or so.

X1

X2

Of course renters are far more likely to work in the industries hardest hit by the pandemic.

More than one third of renters were reported incidents of financial stress (including missing rent payments) before the crisis.

Rising unemployment and falling incomes are likely to increase the incidence of financial stress.

ANZ forecasted unemployment will peak at 9.5% this year

Rents are slipping

X3

Social assistance is generally not enough to avoid financial stress.

Rental stress occurs when a household pays more than 30% of his income on rent.

Of the recipients of government rent assistance in 2019, households that included a person aged 24 years or under one more than 50% likely to be under rental stres

The high rate of rental stress for government recipients is concerning in the context of COVID-19, now that the number of people on Job keeper and jobss.

Source: ANZ Housing Market Update May 2020 which was provided for ANZ Institutional, Markets and Private Banking clients.
The information is general in nature and does not constitute personal financial product advice or take into account your objectives, financial situation or needs.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

If you’re wondering what will happen to property in 2020–2021 you are not alone.

You can trust the team at Metropole to provide you with direction, guidance and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more Metropole
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.

NOW READ:

Australian Property Market Update, May 2020 | Property Insiders [VIDEO]

Which rental markets are most impacted by COVID-19

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.


Michael Yardney

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


'Here is what’s going to happen to rental demand' 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