Now that the NSW Government’s COVID-19 rental moratorium has ended, what – if anything – will happen to the local rental market?
We take a look at the details of the transitional period, the current state of Singleton’s rental market and what it all means for both landlords and tenants.
Singleton rental market update
We’re fortunate that despite the headlines, not many of our renters were significantly impacted by COVID-19, and we continue to see strong employment, and a range of good employment options in our local area.
Around 31 per cent of Singleton residents are renters, making it an attractive market for property investors. Houses in Singleton rent out for $415 per week, on average, with an annual rental yield of 5.2 per cent, while units lease for $310 per week with a very healthy annual rental yield of 7.2 per cent. Based on five years of sales data, Singleton houses have experienced a compound growth rate of 4.5 per cent, and units 0.7 per cent.
In good news for Singleton property investors, the Singleton rental market is currently very tight, with the vacancy rate as of March 2021 a low 0.7 per cent, according to SQM Research. To put that figure into context, a vacancy rate of around three per cent is considered a neutral rental market. The national vacancy rate in March 2021 was 1.9 per cent, while Newcastle had a vacancy rate of 1.8 per cent and Sydney 3.0 per cent. The tight rental market we’re experiencing here in Singleton is part of a wider trend occurring in regional areas including the Hunter Valley, with vacancy rates in the Hunter region the lowest they have been for more than 15 years.
What does it all mean for renters and landlords?
It’s no secret that 2020 was the year of the tree or sea change for many big city residents, with data from the Australian Bureau of Statistics showing that capital cities suffered a net loss of 11,200 people in the September quarter alone, the largest quarterly net loss of capital city residents on record. Sydney experienced a net loss of 4,700 residents to elsewhere in NSW over the same period. That’s roughly equivalent to the entire population of Singleton moving to regional NSW in one three-month period.
The large volumes of people relocating regionally is one of the factors driving the tight regional rental markets. The low vacancy rates are good news for Singleton landlords and property investors, especially since rents are more likely to track higher when there is more competition for rental properties and fewer properties available to rent.
In such a competitive rental market, would-be tenants need to be ready to act quickly and decisively when they find a suitable rental property to give themselves the best chance of success. If you’re looking for a new rental home, make sure your references and finances are all in order and ready to go, so you can pounce as soon as you find the ideal property.
What is the rental moratorium transition period?
As landlords and tenants would know, over a year ago, in April 2020, the NSW State Government introduced a temporary tenancy moratorium in response to COVID-19, restricting evictions due to rental arrears. These emergency measures ended on 26 March 2021, and the next day a six-month transitional period began.
Under the transitional period measures, tenants who are defined as impacted by COVID-19 can’t automatically be evicted for rental arrears accrued during the moratorium period and the tenant and the landlord need to negotiate a repayment plan. NSW Fair Trading can assist if the two parties can’t work it out between themselves. If the tenant and the landlord are unable to agree to a repayment plan, or if a plan is agreed but the tenant misses two consecutive payments at the deadlines required by the plan, the landlord may issue a termination notice or apply to the NSW Civil and Administrative Tribunal (NCAT) to end the tenancy.
Thankfully, we don’t expect this to apply to many Singleton tenancies, but as a landlord, it does pay to be aware of your obligations.