Discounting of Canberra rental listings doubled during COVID-19 outbreak: new data

Landlords have cut their asking rent prices in a bid to entice tenants amid the coronavirus outbreak, with the proportion of discounted Canberra rental listings doubling from February to May, new figures show.

But the suburbs of Page, Oxley and Gordon bucked the trend, a Domain analysis reveals.  

Across Canberra, in a tight rental market, only 7.8 per cent of listings were discounted in February – the lowest across all capital cities.

But this figure rose to 11 per cent in March and 16.5 per cent in April, before edging back to 16.2 per cent in May.

“What’s interesting about Canberra is prior to COVID-19 [in February], the level of discounting was extraordinarily low,” Domain senior research analyst Nicola Powell said.

Dr Powell said the national capital was one of the cities that saw the level of discounting double from February to May.

“What this also says is that no capital city has been immune to the changing rental conditions, they are all exposed to it,” she said.

Dr Powell noted that across all capital cities, rental discounts climbed in March, peaked in April and eased in May, which aligned with the economic downturn brought on by COVID-19.

Independent property manager Tim Westphal said landlords have been willing to negotiate rental prices with tenants in a bid to prevent their properties sitting on the market for too long.

“This time of the year, we do see rental listings adjust prices, however, the impact of COVID-19 has definitely seen discounts offered more now than pre-COVID-19 times,” Mr Westphal said.

“We saw some existing tenants who were struggling to meet rent repayments because of various factors from COVID-19 get a price adjustment on their rentals, and I know a couple of landlords who’ve offered a few incentives or free rent for a number of weeks to secure a tenant.

“Normally at the start of the year there isn’t a lot of price adjustments, but that changed in April as people vacated their homes because of COVID-19.”

When looking at Canberra regions, the Inner South was hardest hit by the pandemic with 20.9 per cent of rentals discounted in May alone. This was followed by the Inner North at 20.4 per cent and Weston Creek at 15.7 per cent.

While Canberra saw an overall increase in the proportion of listings that were discounted, the suburbs of Page, Oxley and Gordon bucked the national discounting trend and saw little to no change.

Page and Oxley offered zero discounts for the month of May, while Gordon saw only 0.6 per cent of listings discounted. The data was based on suburbs that offered a minimum of 10 rental properties in May.

“It shows that there are more families who are more likely to rent on a medium to long-term basis, compared to what a single individual would be looking at,” Dr Powell said.

“In Page, there were only 14 listings for the month of May. However, in Oxley and Gordon, there were a pretty substantial amount of listings with 65 and 154 rentals, respectively.”

Mr Westphal agreed with Dr Powell, noting that all three suburbs were popular hot spots for families.

“Page is a popular area in Belconnen because there are bigger houses available for rent, such as a three-bedroom standalone house … And Oxley and Gordon are popular for families because of the price,” Mr Westphal said.

Meanwhile, the top five suburbs that saw a high number of listings discounted in May were Campbell, Holder, Braddon, Bruce and the City.

Geocon property management head Jessica Kercher said she’d noticed prices decline in recent months as a direct result of the COVID-19 pandemic.

“We’re finding that some rental listings are being reduced from anywhere between $30 and $60 per week and our inquiries have reduced by a third compared to this time, last year,” Ms Kercher said.

“A lot of that is because there are no international students or many interstate people moving to Canberra and occupying properties, particularly those short-term rentals.”

With the closure of borders, universities switching to online learning and tourism grounded, an influx of short-term stays had shifted to long-term rentals, boosting the supply of rental listings on the market, Dr Powell said.

Dr Powell added that these areas were more “exposed to changes in student population”.

“Particularly in Campbell, Braddon, Bruce and the City, the demographic renting in these areas are those under the age of 29, who are also the ones who have been severely impacted by job losses and wage cuts.

“Many tenants were reassessing their situation or moving back to with their families, or perhaps moving into a shared house to cut costs.”

Ms Kercher believes that as Canberra overcomes the pandemic, rental discounts will soon cease as the capital reverts to pre-coronavirus norms.

“What we saw was uncertainty in the rental market but I think now that restrictions are easing and there is a level of normality being injected back in the Canberra lifestyle, it has instilled more confidence in the rental market and we’ve seen an increase in the inquiries that are coming through.”