Residential landlords inclined to keep rents steady during COVID-19 pandemic: CoreLogic's Eliza Owen

Residential landlords inclined to keep rents steady during COVID-19 pandemic: CoreLogic's Eliza Owen
Residential landlords inclined to keep rents steady during COVID-19 pandemic: CoreLogic's Eliza Owen

EXPERT OBSERVER

Plenty of data suggests certain rental markets have deteriorated amid the COVID-19 pandemic.

CoreLogic data showed a 0.8% decline in national rent values from the end of March to the end of August, with more acute falls in the unit markets of Sydney and Melbourne, where rent values have fallen 4.2% and 4.4% respectively over the same period.

The closure of international borders has created a shock to rental demand, as most migrants rent when they initially come to Australia.

An estimated 21.1% of payroll jobs have been lost across food and accommodation services since the onset of the pandemic, an industry where people are more likely to rent.

The exposure of inner city areas to overseas migration, and inner-city workforces to accommodation and food services, has made these markets particularly susceptible to a rise in rental stock, and lower prices. But less data exists on the current dynamics between investors and landlords which is becoming increasingly important as we approach the expiry of a moratorium on evictions, which have already been extended in some states.

CoreLogic conducted a survey of property managers, and other real estate professionals using the RP Data Professional platform. The survey provides some insight into rental conditions across the rental properties overseen by these professions. 

A majority of agencies noted stable tenancy conditions, but a sizeable number saw increases in arrears, rent reduction requests and postponed payments Each survey question had an average of 169 respondents.

Against the wider population of property professionals using the application, it suggests a margin of error in the responses of 7% at a 95% confidence interval. Respondents were surveyed over mid-to-late August. Of the respondents, the majority were located in the most populous states of Victoria, NSW and Queensland.

Nearly half (48.6%) were real estate principals, while a further 35.8% were property managers. Across the larger states and territories, respondents by role were fairly uniform.

Furthermore, respondents managed rental portfolios of varying sizes. The majority of respondents (60.3%) managed a large portfolio of 100 or more rental properties, while a further 14.4% managed between 50 and 99 properties.

Key findings from the survey are presented below About the survey While the majority of respondents noted they had not seen a deterioration in rental conditions over the last two weeks, there is a sizable portion of agencies that had.

Almost a third of real estate professionals had seen an increase in requests for rent reductions, over a quarter had seen an increase in rental delinquencies, and 8.8% had noted an increase in evictions.

Of the real estate professionals who had noted an increase in rental delinquencies, 56.8% were based in Victoria, suggesting renewed restrictions across the state has impacted tenants’ ability to service rent.

Eliza Owen, Head of Research Australia at CoreLogic

Eliza Owen

Eliza Owen

Property market analyst. I hold a first class honours degree in economics from the University of Sydney. I have been a regular economic commentator on FBI Radio, and have been a guest speaker on Triple J’s Hack, 702 ABC Radio, Sky News and at TEDxYouth Sydney. I have provided comment for various media outlets including The Guardian Australia, the Australian Financial Review, Pedestrian TV, the Daily Telegraph and more.

Tags: 
Rental market COVID-19

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