Omicron outbreak plunges NSW rental market into limbo

Omicron has frozen rental markets throughout NSW as people put moving plans on hold and shelter in place to avoid catching the virus.

Tim McKibbin, chief executive of the Real Estate Institute of NSW, said the state’s rental market was in limbo.

There was minimal change in rental vacancy rates throughout NSW during December, with renters reluctant to move.

“The impact of the omicron variant is being felt everywhere and the residential rental market is not immune,” Mr McKibbin said.

The industry expected to see a pause in market activity leading into the festive season, he said.

“However, REINSW members are reporting that this usual lull was exacerbated in December because people are hesitant about the future as omicron continues to spread,” Mr McKibbin said.

“As a result, many are delaying their plans to move, leaving the market in limbo.”

December is typically a month when many renters end their leases – such as students whose academic year ends – and vacancy rates rise.

“In a traditional market we’ve always seen quite high rental vacancies in December and January,” Mr McKibbin said.

“But now I think everything is just frozen. People are just staying put because it’s difficult to find somewhere to move to unless you’re in the inner-city.”

The industry group’s figures show vacancy rates in Sydney’s inner suburbs – which include local government areas such as Sydney, Waverley, Woollahra, Marrickville and Ashfield – tightened by 0.7 per cent to 3.7 per cent during December, pulling the overall Sydney rental vacancy rate down 0.2 percentage points to 2.8 per cent.

But in the country, regional vacancy rates barely budged and remained exceptionally low, often below 1 per cent.

The rental stock shortage in most parts of the state had inhibited movement over the medium term and had been amplified by omicron, Mr McKibbin said.

All rental markets outside central Sydney were under pressure, and had been for at least the past 18 months.

“In other markets there isn’t choice available. If you’ve got a family that’s looking for a three-bedroom home, for example, and you’ve got a 0.5 per cent vacancy rate, the chances are there is nothing in that market,” Mr McKibbin said.

“With omicron, we’re just not seeing the enquiries. People are not speaking with agents about what is available. People are hunkering down and saying ‘I’m going to ride this thing out where I am’.”

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