If you’re waiting for a good opportunity to invest in Sydney’s property market, 2020 may just be the right time to take the plunge.
The year has brought with it some good news for current and prospective landlords, with the Domain Rental Report of December 2019 showing some promising data that the market may finally be ‘bottoming out’ with rent prices tipped to rise.
The news could mean a positive shift for landlords who have struggled to compete with an oversupply of new developments across Sydney, particularly throughout Western Sydney and South West where rental returns have experienced the greatest drop.
According to the report figures, the median weekly rent in South West Sydney sat at $450 for houses – though the larger drop was found for apartments, where rents fell a minimum of $20 and returned a median of $350 per week.
And with new construction still weighing on rents over 2019, creating plenty of choice for tenants in the market for a good deal, it’s not hard to see why these regions have experienced a downturn.
But the oversupply could soon come to an end, with the ‘building boom’ over and a current slow in new construction.
Some experts are tipping the market to stabilise across Sydney throughout the year, with steady population growth expected to absorb new property supply – an ideal prospect for landlords grinding to get a good return without losing their tenant.
Our advice to landlords
In any property cycle, it’s important to be flexible as a landlord, especially if you don’t want to risk losing a good tenant.
While the market may be in its correction phase, where growth starts to stabilise and values even out, the outcomes of this are dependent on many factors outside of the property market. These include population growth, employment, exchange rates and interest rates – and all have the potential to steer prices at any time.
Even in a recovering rental market, consider that keeping your existing tenant or signing a new one may still require some negotiation; for instance, by matching their request for the first week free of rent, or slightly reducing rent to be competitive in the current market.
After all, refusing to compromise could return you with nothing but your property sitting vacant, and a loss of valuable income!
More advice on investing or property management?
Speak to the experts today! Call Prudential Real Estate on (02) 4628 0033, or email us at firstname.lastname@example.org