Real Estate Institute of NSW CEO Tim McKibbin has asked some very serious questions of the current rental market.
In his regular weekly update, the CEO has acknowledged that property demand is currently being driven predominantly by owner-occupiers, despite some areas benefiting from active investors.
He’s flagged a number of investors as seriously considering exiting the market, with many vendors “taking confidence from the strength of buyer demand and month-on-month price increases, with many bringing their plans to sell forward to capitalise on the rising market”.
According to Mr McKibbin, many of these investors would “not necessarily be considering selling” if it were not for the prices currently being achieved.
He argued that, “for some, the uncertainty around tenancy legislation and how the NSW government intends to address rental arrears is simply not worth the headache”.
“Especially when a sale can now reap considerable capital gain.”
While acknowledging that “you can’t blame investors for taking advantage of the current interest in their properties”, Mr McKibbin believes it could pose a serious issue for the state government, which appears to still be grappling with a detailed process for its six-month tenancy transition out of the eviction moratorium policy.
“The dearth of properties available to rent will have long-term impacts on the market, particularly for young people for whom renting is the initial step in the path to home ownership,” the CEO said.
“The question left over for government is: How will it provide homes for tenants to take the place of the rental properties coming off the market, at a time when rental vacancy is already extremely low?”