More rentals up for sale?

By Gerv Tacadena | 25 Jun 2020

Australia's capital cities recently recorded a significant spike in the number of apartments put up for sale, indicating that investors could be "offloading" their properties amid the weak market, according to the latest figures from Domain.

Among the capital cities, Adelaide reported the most significant rise in apartment listings over the four weeks to 14 June at 43%. Sydney came in second at 39%, followed by Perth at 37%, Melbourne at 27%, Brisbane at 15%, and Canberra at 4%.

Nicola Powell, senior research analyst at Domain, said this uptrend in listings, particularly in Sydney, could be a sign that investors are starting to throw in the towel.

"The shift seemed to be concentrated in Sydney at the moment. Perhaps we are starting to see some investors choosing to offload their property because of the disruption in the rental market," she said in a report in The Australian Financial Review.

Powell said this trend could persist if landlords continue to struggle to secure tenants and manage their cash flows.

A recent market update from CoreLogic found that Sydney and Melbourne's rental markets are starting to loosen as demand fails to keep up with the increasing rental stock.

The share of advertised rental housing increased in the two cities in May, bucking the downtrend recorded by the rest of capital city regions, according to CoreLogic.

"An increase in the portion of stock on the market suggests higher vacancies and a looser rental market, which would coincide with falling rent prices," said Eliza Owen, head of residential research at CoreLogic.

Louis Christopher, managing director of SWM Research, said vacancies are expected to hit a short-term peak even with the slight decline in May.

"With an expected 170,000 dwelling completions for this year and still no imminent opening of the international border, I still think rental vacancy rates are going to remain elevated for 2020," he said.

Top Suburbs : st marys , willoughby east , keperra , newcastle , bendigo

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