Vacancies in Sydney's inner-ring suburbs are starting to stabilise but there remains a certain unpredictability as to where vacancies will go this year, according to the latest report from the Real Estate Institute of New South Wales (REINSW).
Overall vacancies in Sydney dropped to 3.3% in December, as confidence returned in the inner-ring region. However, there was a slight increase in vacancies in the middle-ring and regional regions.
"As we reached the end of a chaotic year for the inner city and regional rental markets, the vacancy rates continued to stabilise. Though, with this latest COVID-19 wave now hanging over NSW, it will be interesting to see how the market fares during the first quarter of the year," said Tim McKibbin, CEO of REINSW.
McKibbin said while the job market strengthened in December, tenants are still facing tough financial conditions due to the deadline of the government's assistance payments at the start of the year. This could potentially affect vacancies in certain parts of the city and the state.
Interestingly, there was a slowing of the exodus to regional areas, with some markets already recording increases in vacancies. Wollongong, for instance, reported an increase in vacancy rates to 2.5%. Illawarra also posted an uptick to 1.5%.
"As we begin 2021, it’s clearly a mixed bag with Sydney’s inner-ring settling down while an exodus from the middle-ring continuing, which may see tenants either returning to more popular city areas or abandoning the city altogether for a sea change to regional NSW or elsewhere in Australia," McKibbin said.
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