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A new survey — which took sentiment from property managers, agents and other real estate professionals — has provided pivotal insight into the state of Australia’s rental market.
Utilising its RP Data Professional platform, CoreLogic recently took sentiment from a variety of real estate professionals to determine rental conditions across rental properties overseen by those in the industry. Each survey question had an average of 169 respondents, with respondents surveyed over mid to late August.
“[Not a lot of] data exists on the current dynamics between investors and landlords which is becoming increasingly important as we approach the expiry of a moratorium on evictions, which has already been extended in some states,” said Eliza Owen, head of research at CoreLogic.
According to the findings, almost a third of real estate professionals surveyed had seen an increase in requests for rent reductions. Over a quarter had seen an increase in rental delinquencies, and 8.8 per cent had noted an increase in evictions.
Of those who had seen an increase in rental delinquencies, 56.8 per cent were based in Victoria, suggesting renewed restrictions across the state have impacted tenants’ ability to service rent, Ms Owen noted.
“Despite almost a third of real estate professionals noting an increase in rent reduction requests across Australia, the highest number of respondents (48.5 per cent) noted that, in recent weeks, no landlords had agreed to a reduced rent paid by tenants,” she said.
“Of 83 respondents who had noted that none of the landlords had reduced rents, 66 had said this was less than, or about the same as, March this year.
“The second-highest response indicates that a relatively low portion of landlords had agreed to rental reductions (less than 25 per cent). Of the 84 respondents that had indicated some landlords agreeing to reduce rental payments, 51 (60.7 per cent) indicated that this was around the same proportion, or a slightly lower proportion, than in March.”
The survey also asked respondents: “Over the last two weeks, what proportion of landlords in your rental portfolio have agreed to a modification to a rental agreement to reduce the rent paid by tenants?”
According to the results, 48.5 per cent said none, 34.5 per cent said a few (less than 25 per cent), 8.2 per cent said some (25 per cent to 50 per cent), 6.4 per cent said most (over 50 per cent), and 2.3 per cent said they weren’t sure.
Professionals were also asked about rental delinquencies, with 73.5 per cent of respondents noting someone in their portfolio for the month of August. However, 66.5 per cent of respondents indicated that less than 25 per cent of their portfolios were in delinquency.
“Of the respondents that have noted delinquencies in their portfolio, 75.2 per cent (94 respondents) suggested the portion of properties in delinquencies were the same, or smaller than in March, before the onset of COVID-19. This largely aligns with an earlier question in the survey, which found that around a quarter of respondents had seen an increase in delinquencies over the past few weeks,” Ms Owen said.
“Of the 125 respondents that noted delinquencies, 72 per cent indicated that, on average, tenants were less than four weeks in arrears. However, over a fifth of respondents (22.4 per cent) indicated that average arrears were more substantial, at five weeks to three months. Responses to the survey suggest that a more common occurrence in the rental market through COVID-19 has been the early termination of leases, rather than modifications to existing rental agreements.
“The relatively low level of property professionals that have observed an increase in evictions, a reduction in rents or a change in the state of arrears supports other CoreLogic metrics about rental market deterioration being more localised.
“It is worth noting CoreLogic rental value data is based on advertised rental property rather than changes to existing leases, and may not directly capture leniency from landlords. However, a distressed rental market that saw rent reductions, early termination and evictions would presumably see an increase in vacant properties, indirectly lowering the price of advertised rental stock.”
ABOUT THE AUTHOR
Emma Ryan
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
Email Emma on: Emma.Ryan@momentummedia.
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