PSA: Anyone Looking to Rent an Apartment, The Market Is Dead at The Moment - Put in Lower Offers than Asking Price

LINVOICE on 23/09/2019 - 10:46

Speaking to a bunch of agents at the moment. The market is absolutely dead for rentals especially in Sydney. The glut of properties is finally biting back, returns are dismal, and people are getting desperate. All good news for renters. Many agents have admitted "it's a renters market now".

So don't be rushed or conned, there is a huge amount of rental stock out there and much of it is sitting vacant for long periods of time. Check the listing times for many places, often they are 60-70-80 days listed without being leased!

Knock 10% off the asking price for a rental when you apply. Make sure you get yourself a good fair price. Renters don't get enough of a fair go generally, so if you're moving, now is a good time to get a bit back (especially if you're in Sydney)

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Comments

  • jimbobaus on 23/09/2019 - 11:13
    +5

    As a landlord with 2 properties in the so called dead "Sydney" market i beg to differ.
    We have an open for inspection on one of ours last weekend and got 12 applications and about 25 showed up to look at it
    The property was vacated only a week ago.

    If anyone offered below what we advertised we would just ignore it and go with someone willing to pay asking (or even more)

    I am not talking to the market.. am talking to my personal exp as a landlord with property in NSW and VIC (and WA)

    • starburstyellow on 23/09/2019 - 11:19
      +14

      why is WA in brackets? We are people too you know :(

      • jimbobaus on 23/09/2019 - 11:30

        I honestly do not know why i did that…. Apologies :)
        WA is my fav state :) such a great place

    • Ryanek on 23/09/2019 - 11:52

      Location, Location, Location.

    • mattythecapybara on 23/09/2019 - 14:57

      Except OP's implication is that no one will be putting in at asking price.

      But obviously it matters what the asking price is in the first place (there are plenty of delusional people when the market turns), and how desirable the property is.

      That's the problem with blanket statements in either direction.

      • INVOICE on 24/09/2019 - 16:46
        +1

        No what I'm saying is that there is such a glut of properties that many are sitting on the market for months at a time. It's not that people aren't putting in their applications at asking price, it's that no-one is putting applications in at all, People are being extremely selective.

        You can easily go onto Domain and check the property statistics for the time listed for many properties. I've looked at many over the last month where the time listed is over 60 days.

        If you see that a property has been listed for 60 days without being leased, putting in a low ball offer is just good practice. The landlord (if they have any sense) would be desperate to get some income flowing in and be happy to take it. I mean really you'd be dropping your asking price after 3 weeks unleased if you had sense, but hey some people are stubborn. Real estate agents want places leased, it's in their interest to put forward offers even if they're lower than asking.

  • Bonbi on 23/09/2019 - 11:16

    Yeah nah.

  • [Deactivated] on 23/09/2019 - 11:18
    +1

    op is dreamin

    • INVOICE on 24/09/2019 - 16:47
      +1

      I dreamt, succeeded, and am now living the dream apparently. It wasn't hard. A lot of agents are desperate to get people into places.

  • CyberMurning on 23/09/2019 - 11:19
    -1

    Really? So many can't get refinance from banks now so they need to rent. It's always landlord market unless population is getting smaller by day.

  • 87percent on 23/09/2019 - 11:24
    +1

    op is looking putting in applications in Sydney, and trying to boost his chances

    • INVOICE on 23/09/2019 - 11:57
      +2

      Nope, already signed a lease last week with 10% off the asking price. Knocked back a few other applications we had made with the same 10% off the asking price. Just had a few of the agents call me this week trying to get me in but I've had to say I've already signed elsewhere. I figured since the desperation seemed strong I'd give this PSA to other prospective renters.

  • INVOICE on 23/09/2019 - 11:29
    +2

    I figured there would be a lot of self-interested landlords posting. But you only need to do a search and look at the listed times for properties to see how long many have been avaiable for. Large numbers of properties are being inspected vacant as well meaning the previous tenants have already moved out and there's still no new lease. You can deny it all you want but that's the reality of the Sydney market these days.

    Straight from the mouth of the agents "It's a renters market"

    • jimbobaus on 23/09/2019 - 11:32
      -8

      We are not self interested landlords… we are smart ones.
      No landlord is going to accept a rent reduction.. and even on the small chance they did .. you can expect a rent rise at the earliest opportunity.
      If my agent was telling renters that it was a renters market i would change agents. The market is far from dead its booming.

      • INVOICE on 23/09/2019 - 11:39
        +6

        "No landlord is going to accept a rent reduction"

        Guess that's why properties sit empty for months on end?

        I mean, it seems stupid to me (maybe this is just me) but anything I invest in, i expect to get the best gains possible out of it. If I have a property empty for 2 months, that's two months rent I've lost completely. Whereas if I take a lower rent per week, I get income.

        Yes, of course you can attempt to increase the rent at the end of the lease, but the market dictates the price, not the landlord. It's kind of funny seeing this sort of denaial of basic fundamentals. A glut in property, especially apartments leads to oversupply, leading to lower demand, more competition, and a decrease in prices.

        Prices have noticeably dropped in many inner city areas in Sydney. Units in a single building have lost 10% in rent returns from this time last year. You can ignore this if you want, but it's the reality of the market.

        • jimbobaus on 23/09/2019 - 11:43
          -2

          For Starters when the property is vacant its a loss… a claimable loss so having it empty yeah means no income but its offset by being able to claim the loss

          Secondly the income from the rent has to be worth even having a tenant in, if you offer me below what i need / expect then the loss can not be claimed so i am not going to let it to you.. its literally better to have it sit empty.

          As for raising the rent at the end of the lease, the market will dictate you are right but also the complacently of tenants who do not want to fork out thousands of dollars to move vs the few hundred it would cost them to accept the increase is also a massive factor.
          Its never a renters market no matter what agents say, it is certainly always a landlords market and the demand is higher than you are stating especially in the most populated market of Sydney.

          • INVOICE on 23/09/2019 - 11:51
            +13

            @jimbobaus: "its offset by being able to claim the loss"

            "its literally better to have it sit empty."

            Jesus this is why Australia's property market is so wrecked. Our landlords don't even have basic financial understanding.

            • caramellokoala on 23/09/2019 - 12:07
              +14

              @INVOICE: Yep property investment always attracts morons that think they're going to make it big like reality TV. If they can't understand that a tax offset isn't the same as actual income they have some serious financial literacy issues.

  • Ocker on 23/09/2019 - 11:43
    +1

    OP Newbie is talking his book

  • trustnoone on 23/09/2019 - 11:55
    +3

    Eh I think its kind of relative, I wouldn't say its a renters market, but considering how bad it was (or people thought it was going to be?) I do think its stabilized and got a little better now. On average based on just a personal viewpoint (not some statistical analysis or anything) I'm seeing rent in many places where I'd usually rent for about $440 to $475 seems to now be closer to $410 to $460, so I feel theres a bit of a difference.

    Of course depends on location, wants, needs etc, if you got a place near a train station and shops theres probably no difference at all. I think its more the fact that before 'some' agents could easily not put much work into it and get a bunch of applications through, now they probably have to be a bit more active and they're noticing it.

    • Whisper Quiet on 24/09/2019 - 08:50

      Yeah I have seen a few properties come down a bit but there's always these stubborn landlords who don't want to change price. Seems so silly when even if they have it empty for a few weeks instead of dropping the price a little. It would make up for the difference over the year anyway.

  • Trying2SaveABuck on 23/09/2019 - 11:56
    +3

    I think it depends on location

    • INVOICE on 24/09/2019 - 16:50
      +1

      Of course, it's not a blanket rule. But in any place where there's a lot of apartment development that's been recently completed the supply is absolutely saturated. Think Mascot in Sydney for example. Huge oversupply. Big developments in the inner west, chatswood area, etc. Anywhere where large 100 unit apartment blocks have popped up over the last 5-10 years.

  • profar on 23/09/2019 - 12:00
    -1

    OP what ghost town are you talking about ?

    Big 2 some renter’s only hope to beat the perfect candidate is to offer like 5-10% more paid in advance for the year :)

  • mbck on 23/09/2019 - 12:05
    +5

    Such a broad statement for a complex thing. So many factors in play, to oversimplify things is…well good luck with everyone's application

  • obiwanmy on 23/09/2019 - 12:09
    +7

    OP must be referring to Opal Tower ….

  • n3xia on 23/09/2019 - 12:12
    +1

    OP advice rings true for Darwin and I daresay all of the NT atm.
    Source: I am a landlord and own two properties in Darwin. One of my properties was vacant for months this year with very little interest.

    • dcep on 23/09/2019 - 12:18
      +2

      The market is absolutely dead for rentals especially in Sydney.

  • nfr on 23/09/2019 - 13:04
    -3

    No way. Property market is always going up, it's the law of physics.

  • Odin on 23/09/2019 - 21:20
    +3

    Lot of truth in this. Speak to some (honest) agents in Sydney and see the reality. Oversupply is real and having an impact.

  • lainey13 on 23/09/2019 - 23:31
    +1

    Maybe for apartments with flammable cladding…

  • menocheapsk8 on 24/09/2019 - 08:21
    +2

    It depends strongly on supply and demand, but there seems to be a oversupply in Sutherland shire. Plenty of apartment blocks were constructed during the latest boom and only recently completed. An over supply of new apartments is soaking up demand and making the older apartments less attractive, forcing them to stay on the market longer and potentially accepting lower offers. I have been watching the apartment market locally over the past 12 months and have noticed plenty of apartments being open for viewings while vacant, and sitting vacant for months.

    I have found that agents are starting to accept lowball offers. A colleague had an offer of 20% below asking price for a new apartment but was restricted to a 6 month lease. At the end of the 6 months they tried to increase the rent so he moved out into another apartment (same complex) for just below 90% of the asking price for a one year lease. I moved into a new apartment last month and managed to knock 5% ($25) off the asking price, and it was fairly price to begin with.

    The market will eventually correct itself, but I think renters who have flexibility and can afford the time should try their luck.

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