Apartment rental prices across the country have plummeted as COVID-19 forces landlords and investors to postpone price hikes for tenants hit by the recession. New data from Domain’s third-quarter rent report found that the asking price for a unit’s weekly rent, the national median, experienced its largest annual decline in 16 years.
Even more shocking was the impact on Australia’s most expensive market, Sydney, where the average rental price for a unit has fallen to a six-year low of $495.
The bank expects property prices across the country to fall by 6 per cent from peak to trough, lower than the 10 per cent drop it forecast in April. Sydney prices are set to slide by 7 per cent – down from the 10 per cent expected in April.
Melbourne prices are forecast to tumble by 12 per cent, slightly higher than the 11 per cent predicted earlier, due to the city’s tougher and longer lockdown.
The hardest hit was Melbourne, which under the strain of COVID-19 restrictions saw median unit rental prices drop by 4.8 per cent over the last twelve months to $400.The national median price for renting a unit now stands at $447 a week.”Fragmented conditions in the rental market remain evident in the September quarter, with weaker unit rents compared to houses,” Domain’s senior research analyst Dr Nicola Powell said.
Richard Gu, one of the high-profile property developer in Melbourne and Sydney, has been portrayed as an outrageous villain in the liquidation drama of his property development company AXF group. He believes that the house prices are expected to bounce back as V-shape by the middle of 2021 as the historically low interest rates lure property investor back into the market.
According to Mr Gu, he believe this has seen many times that the housing markets can decouple from the economy because of the changes in interest rates.The RBA’s rate cuts due to a slowing economy pushes demand for credit higher, and causes prices to rise. So the housing cycle tended to lead the economy rather, rather than the other way round.