AS the COVID-19 pandemic continues to place pressure on households and businesses in the Port Stephens region the restrictions on travel and short-stay accommodation has seen the rental market flooded with new listings.
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According to Trent Wilshire, an Economist with the Domain Group, the effects of the CoronaVirus are flowing through to the real estate sector as demand for holiday stays drops.
“The movement of properties from the short-term or tourist market onto the long-term rental market is a reason why rental listings have risen over the past few weeks,” said Mr Wilshire.
“There has been a significant increase in rental listings in the Port Stephens region.
“There were 248 new residential rental listings for the past four weeks, which is 66 percent higher than the comparable period one year ago.”
Whilst the travel restrictions are one factor in pushing more houses into the long-term rental market, Mr Wilshire says that it’s also sellers looking to hold onto their assets through economic uncertainty.
“Another factor driving more rental supply is vendors withdrawing properties from sale and instead renting them out,” he said.
“Other factors having a direct impact is the lower demand for rental properties as people who have lost jobs and income are trying to save money, so they are moving back in with parents, moving in with friends and dissolving share-houses.”
As the fallout from the health and economic crisis continues it’s expected that the surge in availability will not only drive rents down but also property prices as a whole.
“For the rental market in the short-term we’re likely to see higher vacancy rates and more discounting on asking rents which we’re already seeing signs of,” said Mr Wilshire.
“Property prices are likely to decline in coming months and property sales are likely to fall significantly.”
All these factors are expected to severely impact the construction industry as well as the demand for new housing developments and commercial real estate bottoms out across Australia.
By Mitch LEES