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East Coast floods to affect vacancy rates

The floods in Northern NSW could impinge on the state’s already tight vacancy rates according to industry experts.

Real Estate Institute of NSW (REINSW) Chief Executive Officer Tim McKibbin said the unpredictability Covid brought to the rental market had stabilised in recent months, but could return as a result of the East Coast floods.

“After the unpredictability experienced in the residential rental market last year due to COVID-19, the beginning of 2022 brought new hope,” Mr McKibbin said.

“In January, as the pre-Christmas lull started to reverse, many REINSW members reported an increase in demand for rental accommodation across Sydney, Newcastle, Wollongong and many regional areas. 

“However, unpredictability may be set to return as we wait to see what impact the floods have on the market.

“While the full impact is yet to be assessed, we know that many tenants have been displaced across NSW and this will inevitably affect vacancy rates in the coming weeks. 

“Our thoughts are with all landlords, tenants and property managers at this incredibly difficult time.”

The REINSW Vacancy Rate Survey for February showed residential vacancy rates in Sydney had dropped for the third consecutive month.

Sydney’s overall vacancy rate dropped from 2.5 per cent in January to 2.1 per cent in February and down from the 4.3 per cent it reached in April 2021.

Falling vacancy rates in the inner and middle rings have fuelled the drop, with rates in the inner ring plunging from 3.4 per cent in January to 2.8 per cent in February.

In Sydney’s middle ring, vacancy rates fell from 2.9 per cent to 2.4 per cent, while in the outer ring, vacancy rates remained steady at 1.5 per cent. 

“While there was a steady exodus of people from Sydney for much of last year, the tide has certainly turned over recent months,” Mr McKibbin said. 

“Decreasing by 0.4 per cent for the month, the vacancy rate for Sydney overall is now 2.1 per cent.”

Source: REINSW

The number of available rental properties in regional areas have also remained tight. 

“Rates in the Albury, Central West, Coffs Harbour, Mid-North Coast, Northern Rivers, Orana, South Coast and South East areas all rose,” Mr McKibbin said. 

“The Central West, Murrumbidgee, New England and Riverina areas all recorded drops.”

Source: REINSW

Investors more cautious

The East Coast floods have also sparked a change in the type of questions investors are asking when inspecting potential rental properties.

Toowoomba agent Daniel Burrell told ABC News there had been a stark change in the queries coming in from potential investors.

“It started prompting the question of: ‘Did this flood? Is it in a flood zone? What happened in 2022? What happened in 2011?’” he said.

Mr Burrell said the questions didn’t just relate to the issue of potential flood damage, but not having to pay for expensive insurance policies in flood-prone areas.

In Queensland, buyers’ advocate Wendy Russell told ABC News interstate buyers looking for a property in Brisbane were reconsidering where they bought.

“Two weeks ago, they were saying, ‘I’m alright with that being a low-risk (flood) area,” she said.

“But now they’re just boycotting it and saying, ‘No, we absolutely don’t want to buy in any area that’s flood impacted’.”

But Ms Russell said with the Brisbane Olympic Games not too far around the corner, she tipped investment would return to normal eventually.

Help at hand

The Federal and NSW Governments have also announced a $551.7 million assistance package to help flood victims, including $285 million for the Temporary Housing Support Package.

The housing support package will assist about 25,000 households and will focus on helping people move out of their emergency accommodation and find a more permanent place to call home.

Victims will also have access to as much as 16 weeks rental support, by the end of March.

The package will also include $20 million for on-site pods in rural areas so people can live at their properties while they rebuild. 

“This housing support package will help put a roof over the heads of the thousands of people who have lost their homes to help them get back on their feet as quickly as possible,” NSW Premier Dominic Perrottet said.

“Rebuilding won’t be a quick process and that is why we are using a flexible approach to provide people with the help they need now and into the future so communities can rebuild the homes and businesses as quickly as possible.”

Part of the package is $10 million to supply 120 motorhomes in Northern NSW.

NSW Rural Fire Service volunteers drove the first convoy of 20 to their destination over the weekend.

Families and Communities Minister Natasha Maclaren-Jones said more than 1200 people had received emergency accommodation support so far and the motorhomes would help ensure no one is left homeless.

“The recent extreme weather has devastated these communities and we are doing everything we can to make sure people have a safe place to stay that is close to their community and support networks,” Mrs Maclaren-Jones said.

“These motorhomes will be offered to priority areas in Lismore and surrounds where many people have been displaced.”

The NSW Government is also working to secure longer-term housing solutions for people who will not be able to return to their homes for several months or more, and for those who need to rebuild.

Other initiatives include:

  • $4.5 million to support the Housing Flood REcovery Service to manage long-term housing needs and recover.
  • $2.5 billion to provide temporary housing through the hiring of recreation camps in the Northern Rivers. Locations include Camp Koinonia, Lake Ainsworth Sport & Recreation Centre and Camp Drew, with capacity for up to 270 people and on-site facilities for cooking and hygiene.
  • $150,000 for a housing brokerage service enabling the Australian Red Cross to work with private rental companies, such as Airbnb and Stayz, to help connect people with rental homes.
  • $90 million to assist with the clean-up and removal of flood and storm-related damage, debris and green waste for the additional 28 disaster declared LGAs, enabling them to work with Resilience NSW and NSW Government agencies to coordinate clean-up activities.
  • $75,000 primary producer grants extended to all disaster declared LGAs.
  • $50,000 small business and not-for-profit grants extended to all disaster declared LGAs.
  • $1 million grants to additional 28 impacted councils to assist with their immediate social, built, economic and environmental needs.

Anyone who is homeless due to floods can request emergency accommodation through nsw.gov.au/floods or by calling Service NSW on 13 17 88.

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