Though as with many housing market and economic indicators, rental market conditions eased from April to May.
There are mixed opportunities for landlords and tenants across Australia, depending on where they are located. For tenants, inner-city areas of Sydney and Melbourne present the greatest opportunity for negotiating a reduction in rent. For landlords, these same areas pose greater short-term risk.
Rental affordability already showed signs of deteriorating in four of the eight capital city markets over the year to March 2020. Affordability may deteriorate further in the coming quarters due to job and income loss.
For renters who are less affected, or unaffected by the COVID-19 downturn, affordability may improve markedly, depending on the region in which they are located.
Ultimately, the opportunity to secure lower rents is unequal across industry and location. Rental growth has broadly tracked below inflation and income growth and rental affordability has held quite firm across the capital cities.
However, for relatively unaffordable markets like Hobart, broad-based affordability measures should be considered for longer term improvements in affordability, rather than relying a global pandemic to reduce demand.