Suburb where landlords are offering free rent
Landlords in Sydney's Olympic Park apartment precinct, still recovering from the Opal Tower cracking calamity in late 2018, are now bearing the brunt of the Sydney rental market downturn.
The suburb saw a 300 per cent rise in vacant rental listings during March, according to realestate.com.au data.
Owners in the high rise suburb, who are seeking buyers, have been forced into price discounting as they meet the stressed market conditions.
One Olympic Park apartment is offered with the first four weeks rent free.
Haymarket, Double Bay and Gymea are three other Sydney suburbs where landlords are facing huge jumps in vacancy rates amid uncertainty over how seriously coronavirus will impact the housing market.
"Signs of distress are starting to emerge in markets that contain large numbers of rental properties," Nerida Conisbee, realestate.com.au chief economist said.
"Search activity for rental properties on realestate.com.au has dropped in recent weeks, which isn't surprising given many renters are exposed to sectors that have been hit such as tourism, hospitality and education," she noted.
Vacant properties are increasingly being offered with both rental discounts and also sale price discounts.
One Olympic Park apartment, currently listed seeking $530 a week tenants, down on its prior $570 offering, has also seen its landlord drop its asking price from $780,000 to $730,000 plus over the past three weeks.
Property economist Dr Andrew Wilson calculates Sydney asking prices have declined over the past seven weeks by 1.9 per cent or about $23,000 from $1,152,000 to $1,129,000.
Some vendors, especially in boom construction suburbs, face negative equity amid the declining asking prices.
A Zetland vendor who paid $925,000 in 2016 is now seeking $870,000 plus.
Some agents maintain that the expected reduced number of listings could see a floor for how far prices falls, while other housing experts expect better buying opportunities ahead.
Apartment prices are the most vulnerable than houses since investors without tenants may list with urgency.
SQM managing director Louis Christopher think's there's "trouble ahead" for the rental market.
"The weakness in the rental market will probably put off many would-be property investors over 2020 creating more issues on the buy side of the market.
"A stalling in underlying demand for accommodation driven by near zero migration, combined with a reduction in existing tenancy demand as a result of job losses plus a very likely increase in supply from empty AirBNB accommodation will likely mean we can now expect a rise in rental vacancies over this year."
Christopher had previously forecast for a gentle reduction in vacancies in 2020.
The rental offerings are a mix of newly construction housing stock and established apartments where landlords have lost tenants, many heading back home to live cheaply with their parents.
There have also been landlords who had expected international students to continue their occupancy, but instead have not returned from their summer break overseas.
Originally published as Sydney suburb where landlords are offering free rent