Election may be cause of inner city rental decreases

Jennifer DukeDecember 7, 2020

While some areas of Sydney are seeing regular increases in rents, the inner city isn’t faring so well, according to a property manager in the area.

Let’s Rent director, Lisa Indge, said that rents are beginning to drop in the more prestigious areas that her office covers and she believes it may actually be due to the upcoming election.

“We’re not seeing properties racing off the books and we’re actually reducing rents,” Indge told Property Observer.

Top end rental properties in Balmain, such as around the $1,500 per week mark, are seeing $100 taken off of the weekly rent.

“Perhaps the demographic around here is more politically aware or feel they may be more affected by this change in government,” Indge suggested, pointing to the fact that the tenant demographic includes small business owners.

With mixed reactions from investors to the news of a softening in the rental market, Lisa Indge is currently warning investors to be aware of the importance of avoiding vacancies, even if it means reducing the rent.

In the inner-middle ring of Sydney, such as around Dulwich Hill, enquiries are still high for rental properties particularly in the $700 to $750 mark.

“Suburbs close into the city are a little bit nervous while those further are doing a bit better,” Indge said.

Properties weathering through the decline well in terms of tenant interest are that are still  in good condition and have been well renovated.

Two-bedroom properties with parking are also still in high demand. 

“I think parking is going to be more and more of an issue for renters particularly, and therefore investors. You have to pay more but the percentage of rental value attributed to parking as time goes on is going to increase. We’re currently looking at a much higher percentage now than before.”

Scheduled auctions across the capital cities are the lowest they’ve been in some time, with a total of 916 auctions scheduled this week, according to RP Data.

Across the country Darwin leads the nation when it comes to price recovery since the market trough, followed by Perth, according to RP Data Rismark.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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