Nearly a third of rental properties across Sydney and Melbourne have seen their rates slashed in recent months, allowing some tenants to upgrade their digs for surprisingly little coin.
Across Facebook, real estate groups are filled with young Aussies offering rooms with cut-price rates and negotiable terms.
But tenancy data shows those discounts aren’t spread across the board, raising concerns for vulnerable Aussies who might not benefit from the volatile rental market.
Sydneysider Maeve found herself a bargain online, telling PEDESTRIAN.TV she and her friends recently secured a place in Stanmore well below its original asking price.
“In our current place, we were able to negotiate down from $850 to $800 a week,” she said.
“Once we saw how cheap the rental market was, we thought it would be a good idea to jump on it and lock in a year’s rent.”
She’s just one of many tenants who found themselves with unexpected bargaining power, thanks to the chaos caused by the coronavirus pandemic.
The ban on international arrivals, young folks temporarily moving home or with their partners, and AirBnbs reverting to long-term rental options have increased the supply of empty rooms – and lowered rents.
That unexpected overflow of rental options was good news for Rachael, who says the downturn allowed her to move into “a newer, bigger town house” in Bondi.
“I’ve benefited from the dip in rental property prices,” she said, explaining she and her housemates cut $300 a week on what they were previously paying – and notched one week rent-free, too.
“I know it was vacant for 3-4 months before we signed,” she said.
Another renter told PEDESTRIAN.TV they started the hunt for a new place because of lowered prices on the market, only for their existing landlord to offer them a $100-a-week discount.
While some renters have enjoyed that reprieve, figures compiled by the Tenants’ Union of New South Wales (TUNSW) suggest pricier suburbs experienced the biggest downturn in median rates.
The TUNSW’s Rent Tracker shows that between March and May, median weekly rents in Sydney’s Inner West dipped between 5.45% and 6.67% compared to the same time period last year. The difference is more dramatic for the city’s Inner Southwest, which saw prices dip a full 7%.
The story is different in regions with comparatively cheaper rents. TUNSW data shows median weekly rents in Sydney’s outer western suburbs and Blacktown haven’t really budged since the start of the crisis.
The problem is two-fold, says TUNSW chief executive Leo Patterson Ross.
With people looking to cut back on expenses during the coronavirus crisis, “the demand goes at the luxury end, that’s the one that collapses,” he said.
“But actually, that pushes more and more people into the same groups trying to get rents that are affordable to them on lower incomes.
“So the demand there really doesn’t fall, and sometimes the prices don’t change.”
Add a severe lack of accomodation affordable to workers on minimum wage – let alone people receiving government support payments – and there are concerns for vulnerable Aussies trying to secure a place to live.
Throw in landlords who may be more willing to accept a tenant on recently reduced hours than one who is currently unemployed, and the situation gets mighty dicey.
“At the higher end, people actually do compare the properties and go, ‘Well this place is $1,200, and this place is $1,100, but the first one has a nicer balcony,’” Patterson Ross said.
“Whether they’ll make those decisions at the $300-a-week level? First of all, neither of them have a nice balcony, but you just don’t have the option – You apply for both and you hope you get one of them.”
Patterson Ross said he expects some regions to experience further price reductions.
Given Thursday’s staggering youth unemployment figures, you’d have to hope those cut-price rents eventually stretch even further out.
