THE inner west is now a renter’s paradise as landlords grapple with the worst vacancy crisis since records began.
Listing figures show a whopping 3248 rental homes remain untenanted, representing a 3.1 per cent vacancy rate.
SQM Research residential vacancy rates report reveals that June’s vacancy rate was up 0.1 per cent from May, and is the highest the record high of 3.2 per cent seen in December 2018.
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 is tough and landlords were in a strong position.
The vacancy rate has also tripled the 1.1 per cent recorded two years ago in May 2017.
SQM Research analyst Louis Christopher said the inner west is firmly a tenants market. “It will be a while before we see vacancy rates start to decline, and earliest that might be could be towards the end of next year,” he said.
“While the inner west market has seen a large increase in its vacancy rate it still remains slightly lower than the Sydney average.”
Mr Christopher said vacancy rates are yet to peak because of a flurry of new apartments that have come up for rent in the past two years. He said the property downturn has also hurt the rental market as it has allowed many wood be renters to leave the rental market and become first homebuyers.
Many inner west suburbs have seen rents decrease as a result of vacancy rates increasing, according to CoreLogic. Chiswick saw the largest fall in rent, with house renters saving nearly $6000 a year with the median rental price down 11 per cent from last year to $825 per week.
Haberfield houses have seen the median rental price drop $25 to $875 per week, while those in Marrickville have seen house rent fall 5 per cent to $750 per week. Other suburbs including Rozelle, Stanmore, Cabarita and Five Dock have also seen a fall in their median rental price.
Belle Property Annandale head of property management Lisa Stenning said price negotiation between tenants and landlords was becoming fairly common.
“Tenants know they have the upper hand in this market and that they can put in low offers,” she said.
“Landlords also realise that the market isn’t what it was a few years ago and they have to accept that they may need to adjust their price and be flexible.”
Ms Stenning said those with investment properties should be savvy and proactive with pricing to ensure they can find a tenant as quickly as possible.