Vacancy Rate in Sydney to Shoot Upwards
Phil McCarroll writes an interesting piece for the website Your Investment Property where he focuses on the vacancy rate in Sydney and its possible upward movement. The Real Estate Institute of New South Wales (REINSW) feels that the level of vacancy rate is quite acceptable at present but it is expected to shoot upward pretty shortly.
Vacancy rate in Sydney has shot up city-wide
During the month of December, the city-wide vacancy rate shot up by 0.4%, presently standing at 2.1%. The middle suburbs witnessed a rise of 0.7% and chiefly contributed to the city-side upshot. There is a consensus among experts that the spike in December could be attributed to seasonal factors. However, the emerging trends suggest that fresh supply of stock in the inner and the middle suburbs will see the vacancy rate in Sydney go up.
Inner and Middle suburbs
In the month of February and March, many housing projects will be completed in the Inner and the middle suburbs. They will add to the competition. However, landlords would do well not to slash their rents and wait for the tide to pass. Due to a sudden flurry of choices, tenants will be expecting great deals but it is going to be a pretty short-term phenomenon. Slowly, the new properties will be soaked in by Sydney and the vacancy rate will take a dip.
Why will the new stock be absorbed fast?
There are various factors which point to the absorption of new housing stock. Population growth is one and net interstate migration (owing to better employment) is another. Another interesting trend suggests that some stock is being taken away from certain suburbs. So, the equation is pretty much balanced. Certain areas are getting fresh stocks while others are seeing them removed.
Sydney perennially undersupplied
It can be said without much hesitation that Sydney is still undersupplied and a fresh burst of stock will only hit the vacancy rate for a short period unless other external factors come into the picture.
You can read the original article here.
The vacancy rate story
The low vacancy rate in Sydney has meant a landlord’s market, while a high vacancy rate has given rise to a tenant’s market. The shifting dynamics of vacancy rate has let us watch with rapt attention the tenant-landlord game as it has unfolded over the last few years, especially since June 2012.
At this moment, both teams have their supporters. Some feel that the vacancy rate will stiffen, given the never-ending net interstate migration and smart population growth. The opposite camp feels that a high number of housing projects and a mellowing down population growth rate will see the vacancy rate in Sydney go up considerably, and not as a fluke trend but as a trend that’s there to stay.