The rental market in Illawarra appears to be swinging in the favour of landlords according to new data.
Figures released showed Illawarra had a 2.3 per cent vacancy rate over the June period. This is an 0.8 per cent drop from the 3.1 per cent rate recorded in May.
According to the REINSW Residential Vacancy Rate Report, Illawarra also recorded the largest vacancy rate decline of any region in NSW.
A vacancy rate of over 3 per cent normally suggests tenants have the upper hand in the market, while a rate below 2.5 per cent tends to suggest competition for rentals was tough and landlords were in a strong position.
The REINSW report also found Wollongong remains the best region in Illawarra, with it seeing a 1.2 per cent decrease to 2.1 per cent between May and June.
A drop in Illawarra’s vacancy rates is the opposite of the Sydney market, which saw a 0.3 per cent increase over the same period to 3.4 per cent.
LJ Hooker Wollongong property management director Karl Neuschwanger said vacancy rates were low as a surplus of stock from new developments was getting soaked up.
“Around 18 months ago vacancy rates were high because of the new developments hitting the rental market and this favoured the tenant as they had more choice and room to negotiate,” he said.
“The current market probably favours the landlord slightly, but it is very even between tenants and investors.”
Mr Neuschwanger expects the market to remain strong for the coming months, but the vacancy rates could creep up in November when the university year comes to an end.
“Historically they go up at this time (November) as students no longer need properties, but they come down heavily in January and February when the students return and new doctors, teachers and nurses move into the area,” he said.
Stone Illawarra head of property management Catherine Kaye said they are finding newer and maintained properties tend to be more popular with tenants.
“New stock is sometimes easier to lease if they are priced right, but that can also be said for older properties if the owner has realistic expectations,” she said.
A drop in vacancy rates traditionally means rental prices can start to creep and this has been the case in a number of suburbs.
Burradoo, a suburb in Wingecarribee Shire recorded one of the largest jumps in its median rental price, with an average house now renting out for $900 per week — a 20 per cent jump from last year.
Wollongong suburbs including Austinmer, Coledale, Figtree, Bellambi, Windang and Port Kembla all saw increases in their median rental price, according to CoreLogic data. Austinmer had the biggest increase of any Wollongong suburb, with rent up 8.59 per cent from last year to $733 per week.
Port Kembla units saw a modest increase from $300 to $305, while unit rental prices in Wollongong CBD remained unchanged from last year on $420 per week.