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Apartment with Sydney Harbour views being leased for $400 a week as COVID-19 hits rentals

Rents are being slashed in the centre of Australia’s biggest cities because of coronavirus – making water view apartments affordable for middle-income earners.

Advertised leases on a Sydney city studio apartment, a short walk from Circular Quay and the Opera House, have been reduced by 25 per cent.

Accommodation near Wynyard train station is now typically available for less than $450 a week, with similar properties as recently as March advertised for $600 a week.

A similar studio apartment with views of Sydney Harbour is now available for $395 a week. 

Rents are being slashed in the centre of Australia’s biggest cities because of coronavirus – making water view apartments affordable for middle-income earners. A similar studio apartment with views of Sydney Harbour is being advertised for $395 a week

Eliza Owen, the head of research with real estate data group CoreLogic, said the closure of Australia’s border on March 20 was causing a surge in rental vacancies.

‘One of the big drivers of demand for rental accommodation is overseas migration,’ she said.

‘Most people that come to Australia from overseas, whether they are a skilled migrant, a temporary visa visitor or a refugee, will rent when they first come to Australia.’

Before coronavirus stopped global travel, Sydney and Melbourne each received 70,000 new immigrants, or about 60 per cent of the national intake of 240,000 new arrivals.

Eliza Owen, the head of research with real estate data group CoreLogic, said the closure of Australia's border on March 20 was causing a surge in rental vacancies, with 3,000 extra properties available for lease in Melbourne during May. Pictured is a Southbank apartment, across the Yarra River from the city centre, available for lease at $370 a week

Eliza Owen, the head of research with real estate data group CoreLogic, said the closure of Australia’s border on March 20 was causing a surge in rental vacancies, with 3,000 extra properties available for lease in Melbourne during May. Pictured is a Southbank apartment, across the Yarra River from the city centre, available for lease at $370 a week 

Ms Owen said the temporary suspension of immigration meant more properties were empty in Australia’s biggest and previously most globalised cities.

Where COVID-19 has caused most job losses

1. Inner Melbourne: down 10.6 per cent

2. Inner Sydney: down 10.57 per cent

3. Tasmania south east: down 10.47 per cent

4. Melbourne north west: down 9.43 per cent

5. Warrnambool and Victoria south west: down 9.4 per cent

6. Hobart: down 9.33 per cent

7. Launceston and Tasmanian north-east: down 9.33 per cent

8. Victoria north west: down 9.07 per cent

9. Melbourne north east: down 8.98 per cent

10. Gold Coast: down 8.82 per cent

Source: Australian Bureau of Statistics payroll data showing job losses between March 14 and May 30, 2020

‘This may be why an increasing amount of properties across the cities are sitting vacant,’ she said.

Across greater Sydney, total rental stock being advertised rose from 4.3 per cent in April to 4.5 per cent in May.

In Melbourne, the proportion of investment properties on the market for tenants rose from 3.2 per cent to 3.6 per cent during the same time frame.

‘While 3.6 per cent may sound small, it represents a total rent listing uplift of more than 3,000 across Melbourne, up to about 27,000 properties for rent over the month,’ Ms Owen said.

‘This corresponds to a rise in vacancies, and falling rental prices, particularly in inner-city Sydney and Melbourne.’

Separate data from SQM Research this week showed Sydney’s city centre had a record-high vacancy rate of 16.2 per cent in May – a level double where it was a year earlier.

Melbourne’s Southbank precinct, across the Yarra River from the city centre, has an even higher 16.8 per cent vacancy rate.

Brisbane’s city centre has a 13.3 per cent vacancy rate, a level that is almost triple the level of the same month in 2019.

SQM Research managing director Louis Christopher said renters were likely to keep having plenty of choice as Australia’s national border remained closed.

‘Still no imminent opening of the international border, I still think rental vacancy rates are going to remain elevated for 2020,’ he said.

City centre areas also suffered the most from the coronvavirus shutdowns, Australian Bureau of Statistics payroll data showed. 

Between March 14, before the COVID-19 trading restrictions, and the end of May, the number of jobs in central Sydney and Melbourne both plunged by 10.6 per cent, a level significantly deeper than the national average of 7.5 per cent.  

Separate SQM Research data showed Brisbane's city centre has a 13.3 per cent vacancy rate, a level that is almost triple the level of the same month in 2019. Pictured is a Kangaroo Point apartment available for $430 a week

Separate SQM Research data showed Brisbane’s city centre has a 13.3 per cent vacancy rate, a level that is almost triple the level of the same month in 2019. Pictured is a Kangaroo Point apartment available for $430 a week

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