Caleb Thomas - Rented through this Business for about 3 years. I don't anymore however they have excelled my vision of what a Property Management Group should be!!
Residential vacancy rates for the Sydney and Brisbane CBDs climbed even higher last month, with almost one in six apartments now sitting vacant, dealing a fresh blow to investors who are already struggling with falling rents and property values.
The CBD apartment market has been hit hard by border closures that have cut demand from international students and tourists. Homes typically listed for Airbnb also flooded into the rental market, further adding to supply.
The record rise in vacancies has triggered widespread discounting in asking rents across major cities, threatening investors' cashflows.
The vacancy rate for Sydney CBD apartments blew out to 16.2 per cent in May, up from 13.8 per cent in April and almost tripling the 5.7 per cent recorded in March, the latest SQM Research data showed.
In Brisbane, the proportion of empty CBD rentals rose 2 percentage points to 13.3 for the month, more than double the 5.7 per cent recorded a year ago.
In Melbourne's CBD, almost one in 10 (9.3 per cent) apartments were vacant, up from 7.6 per cent in April. Southbank vacancy rates soared to 16.8 per cent – a record for the area.
But SQM Research managing director Louis Christopher said vacancies in the rental market may have hit a peak after May's rises.
"We have noticed that for the month of June to date, there's been a slight decline in total rental listing," he said.
"I think what's happening is Airbnb property owners have now pulled back from long-term listings and are now waiting this time out in the hope that the borders will be opened shortly."
Total rental listings fell to 98,061 on June 9 compared with 105,277 recorded in May, suggesting vacancy rates may drop for this month, Mr Christopher said.
"I think the surge of Airbnb properties into the long-term leasing market is over for now," he said.
"Airbnb owners realised that they can't find a tenant in the long-term market either. At the same time, restrictions have now been lifted in some states or are in the process of being lifted."
SQM estimates that at any given time, there are around 120,000 Airbnb properties available for rent across Australia. In April, about 30,000 Airbnb properties were likely to be listed in the long-term market amid the lockdown.
"When we see the borders open and people arriving in Australia once more, or even just interstate visitors doing business trips or holidays, it may improve the CBD vacancies, but we don't know when that's going to happen," he said.
"My expectation is we might see a little bit of improvement once state borders open up, but the real improvement won't happen until we see the international border being open.
"But potentially, in the short term, vacancy rates might not rise much further than here."
Mr Christopher said CBD investors were facing a tough time despite a slight drop in rental listings.
"The CBD markets will be very soft and patchy for a long time," he said.
"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."