July Rental Market Update
SQM research has released their report into Vacancy Rates across the country. Across Sydney it shows that the vacancy rate for June 2019 now sits at 3.5% which may not mean a lot to many. Statistically 2% vacancy is considered to be indicative of stable rental market while higher vacancy rates suggest rents will fall. So, 3.5% isn’t great news. In June 2018, the vacancy rate in Sydney was 2.8%. That’s a deterioration of 25% from last year to now. It probably won’t surprise you that unit vacancies are worse than houses. This is a direct result of the unit building boom. However, our area is different as they say, so I accessed a specialist report from SQM Research for postcode 2112 because it is indicative of our local area.
Vacancy rate for 2112 is sitting at 4.5%, and that is really not good.
On property prices and growth, SQM use a star rating system for each postcode to identify areas they consider good buying. 2112 comes with a 3.2-star rating which means as they say,
‘There is greater than average risk of the area underperforming over the medium term’.
But always with statistics, you have to ask, ‘Compared to what?’
Well across NSW, postcode 2112 still rated better than close to 60% of all the postcodes. In fact, around 50% of postcodes were rated as areas that required ‘Strong Caution’ or just flat out ‘Avoid’. Real estate is going to stay tough for a while, but we will still be better off than plenty of other Sydney property owners.