Sydney & Melbourne Home Prices Drop
The owners of over 2000 units in Melbourne and more than 2200 flats in Sydney intend to list their property, potentially flooding markets that are already grappling with oversupply, a survey conducted by Digital Finance Analytics shows. Landlords with rental apartments in Sydney and Melbourne’s central business districts are expected to be a major part of the exodus due to the mortgage repayment holiday ending in March resulting in cash flow issues. This trend is backed up by a recent ME bank survey that showed 23 per cent of investors are wanting to sell their property in the next 12 months, compared with only 11 per cent of owner occupiers. Investors are finding it hard to fill apartments, as Australia’s international borders remain slammed shut. It’s creating high vacancy rates and competition, forcing landlords to take reduced rent with drops of up to 30 or 40 per cent, meaning some CBD landlords are struggling to even cover their costs, according to Andrew Wilson, chief economist of Archistar. He said the closure of borders had also dampened the travel market meaning thousands of apartments that were used for short term stays like AirBnb had also hit the market, exacerbating the problem. It will mean a drop in prices for units that go up for sale.
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