It’s certainly no secret that prestige properties are having difficulty securing the high sale prices that may have been once been achievable for vendors before the market down turn.
As the property market becomes tighter, we are seeing more properties coming into the rental market as owners of luxury properties are avoiding selling, and are choosing to lease them instead. Owners are hoping to keep their homes, rent them now and move back when the property crisis is over.
The situation, however, is looking somewhat bleak as we see high-end rental property returns falling by approximately 25% due to over supply and falling demand in Australia’s wealthier suburbs. You only need to turn on the news to hear the number of global companies bringing their overseas staff back home, and sending far fewer in addition: highly problematic for the prestige end of the rental market as this is the traditional source of tenants.
Increasingly we are seeing tenants negotiating the rent down, offering an added incentive of paying rent by up to three-six months in advance, which makes it attractive for landlords. On average in Sydney, typically we see property owners initially seeking $1,500 AUD per week but achieving $1,100 AUD per week, or initially seeking $3000 AUD but achieving in the mid-low $2000’s AUD, albeit with the bonus of the peace of mind of advancement in rent. Achieving a delicate balance is perhaps the preferred outcome for now.
Marquette Turner Luxury Homes