The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1266 WHAT THE HELL HAPPENED TO THE RENTAL MARKET?
Is the Sydney rental market finally cooling off? That's the question on everyone's minds as we navigate this surprising shift. Join us as we break down the unprecedented turnaround from a red-hot market with record prices and queues at every listing, to a more balanced landscape with increased availability. We'll share our thoughts on whether this is a temporary winter dip or a sign of things to come, and what it means for both renters and landlords in the Northern Beaches.
Caught up in the whirlwind of weekend events, including the latest Trump saga, we found ourselves pondering the nature of media consumption and its effects on our lives. Yet, we quickly pivoted to the topic that affects our daily grind: the rental market. With firsthand experiences and a wealth of data, we offer an in-depth analysis of the current trends and future outlook. If you're a renter relieved by the reduced competition or a landlord concerned about maintaining growth, this episode is packed with insights tailored just for you. Don't miss out!
What many agents want to talk about this, but we will. Oh my gosh, what a weekend. What happened? What happened this weekend? What happened? A couple of things. We're talking about Rental market. We're going to talk about the massive change, but before we do, what happened this weekend? Xanth.
Speaker 2:I feel like Blinken was over. It just went by way too quickly. Busy day at work on Saturday and then connecting with friends and family yesterday. How about you?
Speaker 1:I got caught up in the Trump news.
Speaker 2:Wasn't that wild Wowzers. I went down the Trump news. Wasn't that wild Wowzers?
Speaker 1:I went down the rabbit hole.
Speaker 2:And where did that lead you?
Speaker 1:You just get sucked up in crap and you hear the same thing over and over and over and over, looking for new information. It's like this information isn't even going to help me in my daily life. Why am I consuming this all my time?
Speaker 2:But you still spent hours doing it, didn't you? Going down that rabbit hole.
Speaker 1:Yeah, like you're just watching different news channels and you know you hear the same thing 99% of the time and then you hear one thing 1% new thing each time and you're like, oh yeah, great, but what am I going to do with that news from the trump stuff? And I'm like, why am I consuming all this information?
Speaker 2:why topical. It's interesting it doesn't happen very often the attempted assassination of the president, so I'd want to read about that too unbelievable good luck.
Speaker 1:good luck to, uh, to mr don Trump. Now Xanth the rental market. And this is a bit of a delicate discussion to have online with people, because as an agent, you always want to be talking it up and when it's not up, you're sort of like, yeah, I don't really want to talk about it, but the rental market's changed.
Speaker 2:Tell us, tell us, tell us tell us, tell us, it was hot, hot, hot. Fast-moving properties, record rental prices, lines like literally queues of people out the door to each rental property and it was just hot potato. Least, least, least least. Now, fast forward six months. You know what it was hot one minute now.
Speaker 1:It's not right now and I just didn't see it coming no, neither would I.
Speaker 2:It's like it was fast, fast, fast, fast, fast, and then instantly I don't know at what point, maybe a month or two ago it's just stopped and now it's low it's weird because and just just people out there, just to give you a reference, we're northern beaches, we're sydney, australia.
Speaker 1:We are the largest rental business on the northern beaches. So we manage 16, 1700 properties residential and commercial and we were having a great old time. Now we would normally carry as in, advertise about 40 to 50 properties for lease. That was pretty normal for us. Now that number changed to about 5 to 10. So we only had five open houses on a Saturday, 10 open houses on a Saturday for rental. So that's how low it actually got. Now it's back to 50. 50. Yeah, 50. 50.
Speaker 2:Yeah, 50. 50., what? Well, the rental market is typically slower in the winter season, regardless of it being a rental crisis or anything like that. So I kind of did anticipate it would slow down a little bit around the colder season, but just not as quickly and not as much as it has done right now.
Speaker 1:Do you reckon it's a winter thing, a beaches thing, or do you reckon it's going to stay like this through summer?
Speaker 2:Oh, that's a good question. I wish I had a crystal ball as well. I think that it will stay relatively slow like this until summer, and then it will pick up again, not with the same traction we saw the summer that we've just been through, but it certainly will balance itself out and pick up again.
Speaker 1:That's interesting. But you know what? It's great news for renters out there that that ferocity in the marketplace is not there anymore. Landlords, don't be sad, because you've actually retained that growth. So in our core market we probably saw 10% growth in rent over 12 months and over 12 to 24 months another 10%. So there's probably been about a 20% 25% growth in the last two years in the rental market. That's still there. So the prices haven't gone down. They've just simply levelled out and they've just found a new level with rental prices. But I think for tenants the good news is it's not just violently going up and up and up any longer.
Speaker 2:Absolutely, and I mean when we had a discussion last week during our staff meeting and the products were all around surrounding affordability. So if you do want to have a really healthy lifestyle, tenants are actively moving outside of the northern beaches or to other areas where they can afford to have all of the bells and whistles. However, if they did want to stay in the northern beaches, you might find a family of three or four staying in a two-bedroom apartment versus a house or a townhouse versus a house or a townhouse.
Speaker 1:Yeah, it's all underpinned by affordability and, I think, now an option for people. When COVID started, everyone sort of more went to a house and more went to their own space, whereas the multi-generational rental where grandma and mum and dad and the kids would live in one house even adult kids is coming back more and more. So these guys are sharing households more, sharing cost of living, you know the food, grocery bills, insurance bills and that stuff. So sharing is caring. So I think that's probably, I guess, explains why it's, maybe even why the rental market's a little bit more conservative, because people aren't optimistic, they're sort of just consolidating.
Speaker 2:I also think that a big part of that as well is the media is not driving that narrative of rental prices move quickly. It's speed, speed needs to move now. You don't have that concept in the background. So I also think, additionally, that's helped to disdain the level of that.
Speaker 1:And something that did pick on with the rental market was immigration. They did, and I always said this, because when people were saying immigration was out of control, and I was always saying it's in control. So, when you look at immigration over the last five years, for instance, we had a massive hole when we sent everyone home in 2020, 2021. There was a huge dip. A lot of people left the country and then, when there was this huge influx, people shit the bed and they were like hang on. And I was always like now, hang on a sec, we're just filling the hole of. You know, we're sort of still the same batting average. So I actually think, when it comes to uh, population and when it comes to immigration, we're sort of back in black. We're not. We're not crazy high influx in numbers, but we're just sort of back to black. We're not crazy high influx in numbers, but we're just sort of back to our regular. So I think, hence, maybe that's why the rental market's back to the regular.
Speaker 2:Yeah.
Speaker 1:And what do you think it's?
Speaker 2:going to look like in the next six months. What do I, what? What do you think? The rental market? Come on, let's lay down your predictions. How will it look in the next six months?
Speaker 1:Same. I reckon it's completely leveling out. I don't think we're going to see an increase. I think for the whole year we'll probably see a 5% increase for the next 12 months in the rental market. That's my punt, Yours Residential.
Speaker 2:Residential residential. Yes, I do think it will be seasonal, so I think we've got a lull now and and come summer time, more people will want to do it. Um, but I don't think it will be as hot as it was over the last was over the last year. I think we'll still continue to see a slow increase in rental prices not to the tune of plus 10% year-on-year where they have been.
Speaker 1:While we're on that, I think it is an excellent time to negotiate a commercial lease For people that don't know. In commercially industrial, for instance our core market, the Northern Beaches there have been 130 properties the last three months come on, so 130 properties have dropped into our marketplace on that website and on that website 35 properties have leased. So I think if there's one market that's really correcting itself, it's the commercial industrial retail market and I think if you're if you're resigning a new lease for the next three years, you can probably negotiate a really good deal at the moment very.
Speaker 2:And there you go, oh, interesting.
Speaker 1:Very yeah.
Speaker 2:And there you go.
Speaker 1:That's a wrap.
Speaker 2:Zant, have a great day you too.
Speaker 1:Mr Donald Trump, congratulations on surviving that awful attack.
Speaker 2:How is he feeling today? Shaken not so bad.
Speaker 1:He's got to be the luckiest man in the world at the moment. Today. Absolutely I'd be buying a lot of Unbelievable. Anyways, have a great day. Thank you everyone. Have a great week. Enjoy your weekend.
Speaker 2:Bye, see you, bye, say bye.