Rental Relief for Tenants

It looks like those with flexibility to move are doing so as the economic news goes from bad to worse in Australia this week. Miner BHP-Billiton has announced the loss of over 3000 jobs in Australia and for once it appears those who are not tied into the property market are doing the right thing -they are down-sizing.

The Australian is reporting that both inner Sydney and Melbourne, by definition the most expensive rental areas are experiencing an increase in rental vacancies. As reported by The Australian

According to analyst SQM Research, the number of vacant properties in Sydney’s affluent eastern suburbs more than doubled to 4300 in the year to December.

“In inner Melbourne, there were 2243 properties available for rent, up from 1400 a year earlier.

SQM believes that:

“If you know times are hard and you’re worried about your job, chances are you will opt for cheaper rent. People are opting for a $600-a-week rent now, rather than, say, $1000 a week — it’s as simple as that.”

Actually I think if you think $600 is cheap rent you are deluded but that is another post. What is happening that people are moving to more affordable outer suburbs. Melbourne’s most expensive suburb Toorak has a 7% vacancy rate (up from 5%) this time last year. In Sydney posh Vaucluse the vacancy rate is 11.4% while working class suburbs of Bankstown and Liverpool have rates of less than 2%.

According to The Australian the increase is being driven by developers dumping unsold apartments on the rental market and to a lesser extend private sellers who haven’t, doing the same thing.

The reality is that, if they still have jobs, most of the younger people who typically rent in inner cities are probably not that directly affected by the economic crises, but are maybe seeing a chance to save a bit of money, especially now that petrol prices have fallen a bit of a commute is a small price to pay for a big decrease in the rental cheque each week.

Cheap Rent?

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