The fallout from COVID-19 is affecting Sydney property in both the sales and rental markets.

As real estate sales are adjusting to manoeuvring with private inspections (public auctions and open inspections are both banned for now), the rental market is throwing up its own obstacles.

This comes at a time when owners would usually look to the rental space for some reprieve, while waiting for a more logical time to sell. Right now, that’s not as easy at it sounds.

Rental stock levels are up, prices are down. Rentals and sales have never been so intertwined. Competitive pricing is key in both arenas.

The rental market is being flooded with more stock, including properties that were previously available in short-term letting, the AirBnb market, as well as with stock that has been diverted from the sales market.

For would-be sellers considering the rental market, this is likely to further add to the stockpile in coming months. 

Rent reductions are also being assessed with our existing managements, mid-tenancy. With around 2700 properties under management, more than 400 requests have come through, with most requests averaging between 20% and 30%.

At the same time, softer rent prices are impacting the decisions people are making around whether to proceed with a sale, or to move their property to the rental market instead.

Here are a few examples leased in the past 7 days:

304/1a Great Buckingham Street, Redfern
Previous rent $1,270 per week, now leased for $1,050 per week.

3/424 Elizabeth Street, Surry Hills
Previous rent $520 per week, now leased for $430 per week.

36 Selwyn Street, Paddington
Previous rent $1,015 per week, now leased for $750 per week.

Sales prices need to resonate with people too. At 77 Hordern Street, Newtown the closest comparable sales were just above $1 million. It was about to launch with a guide of $975,000 to see where it would end up, but first homebuyers snapped it up prior for $1.1 million.

In the Burcham development, 62/8 Crewe Place, Rosebery was priced to sell at $1.35 million. Someone made an offer ‘sight unseen’ at that price.

Meanwhile, in all situations where tenants are suffering hardships and loss of employment from COVID-19, we are opening up negotiations with landlords to consider their options. When we’re presented with evidence of the hardship, we’re working through each case as it comes.

With a lease being a legally binding contract, in which all parties have obligations, and tenants must pay rent, the rental amount and term can only be negotiated by mutual agreement.

In these negotiations, most landlords want to understand the extent of the tenant’s circumstantial change, with evidence presented, and are factoring that in accordingly.

As these moving parts are changing each day, we’re doing our best to keep you updated, informed, and prepared.