Breathless good news on rental affordability from Tele land this week.
Citing Real Estate Institute of NSW data, the state's favourite tabloid told
us that rent in some of Sydney’s blue chip neighbourhoods – including Bondi
Junction, Neutral Bay, and Manly – is down by between $25 and $70 per week.
REI president Malcolm Gunning attributed this fall to a
‘glut’ of new apartments released onto the market in 2014.
A strong second
quarter does not a triumph make
But we suggest caution before jumping to any of the same conclusions. Whilst REI data is not freely available to
the plebeian blogosphere, it’s worth noting that the basis for the article’s
claims appears to be a REI study of the second quarter of 2015 alone. This is a
perilously short period of time from which to be drawing any bold conclusions
such as these.
What's more, as the second quarter takes place over both a
university break and the feared ‘polar vortex’ period, autumn and winter variations for rent in student and waterfront neighbourhoods are also relevant. Indeed, of the ten
suburbs cited in the article, six are beachside or waterfront, and two are
situated in the immediate vicinity of Sydney University or the University of
New South Wales. Bondi Junction arguably fits both criteria.
Remember too that REI data is based on asking rather than
actual rents. As we noted
recently, this paints a misleading picture of the market. Far more reliable
is the equivalent data in the Rent and Sales Report – based on the rent paid in new tenancies, as discerned from rental bonds lodged with Fair Trading (i.e. almost all
of them). And published free of the desire to push any particular narrative.
That, too, is a quarterly publication, with the second quarter
edition due in a tantalising 21 days. We will wait on its findings before making any breathless conclusions
of our own.
