Rentals across Australia have been plummeting since the pandemic, with units in particular suffering their biggest price drop in 15 years, new research has revealed.
Rental prices fell across most major capitals, with Sydney and Hobart units recording the steepest quarterly fall on record, reducing by $20 and $35 respectively.
Sydney’s house rents remained stable over the quarter, but are still down 3.6 per cent on their 2017 peak.
Unit rents tumbled as much as $50 a week in the city and eastern suburbs, and $40 in the northern suburbs, with Domain senior research analyst, Nicola Powell, urging Sydney tenants to ask for rent reductions.
“Tenants are in a strong position to negotiate prices or seek out cheaper properties,” Powell said.
Powell said tenants had the “novelty of choice” as well, as the volume of rentals on the market has increased.
Also read: How to ask for a rent reduction
“The rapid rise in advertised rentals has put pressure on rents,” she said.
“Tenants are using this as bargaining power to negotiate a deal while landlords compete to lure them.”
And the downward trend in prices is likely to continue as foreign student numbers and overseas migration have plummeted, she said.
Melbourne tenants are also in a position to ask for rent reductions as international border closures have meant vacancy rates are higher.
Inner Melbourne saw median house rents drop a staggering $40, and units $35 per week, and advertised rentals surged 64 per cent from March to June.
“This has created a discounting war, forcing one-third of inner Melbourne landlords to slash asking rents in an attempt to secure a tenant,” Powell said.
Melbourne saw such steep declines due to a drop in overseas migration, student population and tourism.
“Vacancies are likely to remain high in the coming months across metropolitan and tourist areas, which could result in further rent reductions.”
In Canberra, house and unit rents fell $5 and $10 per week respectively, with rising vacancies pushing down prices.
However, this could be short-lived, Powell warned.
“Despite rental prices sliding over the quarter, rental conditions remain competitive as tenants compete in the third tightest capital city rental market,” Powell said.
Hobart experienced some hefty falls, but Powell said these were unlikely to continue as restrictions ease and people resume interstate travel.
Adelaide, Perth and Darwin have bucked the trend, with rents remaining steady.
Read next: How to ask for a rent reduction
Are you a millennial or Gen Z-er interested in joining a community where you can learn how to take control of your money? Join us at The Broke Millennials Club on Facebook!