In 2020, Covid had a devastating impact on the apartment rental market in Melbourne and Sydney. Many are asking what is happened to those markets during the latest lockdowns in 2021?
To answer that question, it is important to remember that at the start of Covid in 2020, and particularly during Melbourne’s two lockdowns in 2020 totally 154 days (5 months), there was a major change to both the supply and demand metrics of apartment rentals. Demand suddenly dropped as renters moved back in with “Mum & Dad”, went back to their own country or state, or moved in with each other to save money. Simultaneously supply spiked, as anyone from Airbnb to hotels and serviced apartment operators put many rooms on the long-term rental market due to all travel being shut down.
This seismic shift in the supply and demand of apartments for long term rental caused apartment rents in Melbourne and Sydney to drop by 10% – 30% or more depending on the apartment’s size and location, with the smaller, inner CBD apartments the worse effected.
The lock downs in Melbourne and Sydney in 2021 has had only a minor impact on apartment rents, because there has been no real change to supply and demand like there was with travel restrictions in 2020. The rental market has definitely quietened down in August 2021 in both cities due to the lockdowns but interestingly Sydney agents are still able to do one-on-one inspections and appraisals.
Also, in mid-2020 owners had little choice but to drop the rent as some income was better than no income for the next 12 – 24 months. Today the end is in sight and owners have the option to wait until later in the year in the hope the market will improve. (Realistically however it won’t increase enough or in time to compensate for several months of lost rent.)
It is almost certain the apartment rental market with rebound strongly during the summer of 2022 assuming travel restrictions ease by then.
