Decreased rental housing stock and an increase in the number of renters is leading to increased competition over properties. It’s creating a situation where finding a property to call home is a frustrating, competitive process for would-be tenants.
These are the findings of a recent survey by realestate.com.au who note 47 per cent of renters find it frustrating to compete over properties.
This is the all-too-real scenario driving the Sydney property market, so here’s a little insight into how it works.
As more and more millennials find it unaffordable to buy into a booming Sydney housing market, their attention turns to renting, but the pool of potential properties has been reduced by the short-term rental market.
Fuelled by the likes of Airbnb, properties that would formerly have been let to long-term tenants are instead being offered on a short-term/holiday basis.
Beachside suburbs and inner city precincts are the most likely to be impacted as properties open their doors to the more lucrative short-term market.
“It is getting harder in certain suburbs to find rental properties,” REA Group representative Andrew Rechtman told realestate.com.au.
“So in some areas where there’s a high penetration of Airbnb there might be a reduced number of long-term rentals on the market. Particularly in areas that are beachside suburbs or tourist areas,” he says.
Earlier this year, the University of Sydney estimated that 6000 long-term rental properties in the Harbour City had disappeared into the short-term rental market, meaning long-term tenants miss out more often.
This is creating a unique situation for renters who find themselves competing in a market where demand is high but shortage is low.
Particularly pertinent in the inner-city region, it’s driving renters out of the city and creating increased competition for what little stock is available.
“The demographic trend is that more and more people are coming into the rental market as they are being priced out of the market for buying properties,” Mr Rechtman continued.
“So there is more competition coming into the market for existing rental properties that are out there. At the same time, there’s also more tools and more ways to find out information about rental properties so that probably also drives an increase in the level of competition,” he says.
The high demand but low availability of Sydney properties is leading to increased frustration for tenants seeking a long-term abode.
The few properties that are available often attract multiple applicants, are in the high price range and require fewer inspections.
Great for investors
While the news is frustrating for tenants, it’s bright for investors who are almost assured of a solid rental income from their home in the Sydney surrounds.
Meanwhile, destinations further from the city are commanding higher prices as tenants look farther afield.
Key tips for renters include having your application ready when attending an inspection, ensuring your references are up to par and there are no gaps in your information.
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