dwell. on the Northern Beaches. 060820

Rental Scene.
By MARTIN KELLY
Heavy competition, limited stock
The northern beaches residential rental market is
emerging from the COVID crisis in surprisingly good
shape and now confronts an unlikely dilemma – demand
exceeding supply, leading to a shortage of properties
– something no-one saw coming during the uncertain
months of April, May and early June.
During that period residential stock levels and vacancies
blew out to historically high levels.
There were several factors – financially stressed tenants
voluntarily moving out, investors shifting properties from
short-term rental platforms such as Airbnb to
the long-term market, and lack of consumer
demand.
Rents were discounted by 10% to 35% to
either keep existing tenants or secure new
ones, a strategy that gained momentum as
consumer confidence returned as lockdown
restrictions eased.
Now agents say rents are back to or ahead
of where they were in February, there is a
shortage of supply and tenants are rushing to
sign leases on quality properties – when they
become available.
Lauren Bridges from Belle Property, Dee Why, says
demand is running hot.
“We’re seeing huge numbers of enquiry, huge numbers
through opens as well as a real push up in price,” she says.
“Something might be listed at $500 but we’re tending to
negotiate 10% over the asking price just because of the
demand.”
Bridges says the early days of COVID were frantic before
the market stopped dead.
“Almost overnight inspections and enquiry just stopped
and we couldn’t give properties away. We reduced rents
anywhere between 10% to 35%. In some cases, we were
negotiating $400 a week discounts with current tenants.
“But over the past three or four weeks, demand has
increased dramatically. We had a couple of opens last
Saturday and they were leased by Saturday afternoon.”
She says rents are back to where they would be in spring
and in some cases more. “Some of the prices are stupid,
‘We’re tending
to negotiate
10% over
the asking
price [due to]
demand...’
crazy. We’ve got nothing left, we’ve leased everything, we
need more stock.”
Trent Docherty, Partner at Cunninghams, says the
agency has around 25 rentals compared with 55 to 60
during COVID, which at the time forced rental discounting
of around 10% for apartments and double that for houses.
He says there has been a dramatic market shift over the
past six weeks. “We’ve got multiple people looking to move
into the area and are getting groups of 10 though each
open home,” says Docherty.
“Now with the supply-demand scenario,
apartment rents are back to where they were,
while houses are up between 5% to 10%.”
Looking ahead, Docherty believes the
market will steady, provided there is no
‘second wave’.
Mark Novak, owner of Novak Properties
at Dee Why, says his business experienced a
dramatic rise in stock levels during COVID.
“We normally have 20 to 35 properties
for rent at any one time but that blew out to
almost 70 properties during March,” he says.
Rents were discounted by 10% to 15%. “It helped
move the stock, get it out the door. I think there was an
expectation Armageddon was coming.
“Then there was a recovery in the stock market and a
recovery in sentiment. As we came out of the lockdown it
just got better and better. It was really a sentiment thing.”
“Our past three months have been the highest turnover
months we have ever seen.”
Andrew Blake, Principal at Blake Property in Avalon,
says rental demand is much greater than supply. “It is
really tight. We’ve got so much enquiry coming through
but not enough properties,” he says.
Blake says the lack of homes for sale on the beaches is
exacerbating rental market demand from people who have
sold but cannot find another property to buy, so they are
leasing instead.
FROM TOP TO BOTTOM:
6/7 West Promenade, Manly
2 Bed / 1 Bath – $895pw
Available from Aug 15.
Contact: Cunninghams
34a Veterans Parade, Wheeler Heights
2 Bed / 1 Bath - $570pw
View: Saturday 12.00pm-12.15pm
Contact: Novak Properties.
2a Moresby Place, Allambie Heights
2 Bed / 1 Bath – $780pw
Available from Sept 16.
Contact: Belle Property, Dee Why.
42 August 8, 2020 <strong>dwell</strong>.sydney