Owen Raskovich

Well...

The thing about this is, and it comes back to the supply and demand thing again, is that we've seen, according to some data and data from SQM, which is a financial property market intelligence organization, SQM say that rentals in terms of payments and rental rates are down 5% in Sydney and 2% in Melbourne so far.

And they estimate that Melbourne and Sydney will be the worst affected because I'm about to talk about something else, which is called migration and population growth.

And also the types of jobs that are in Melbourne and Sydney are a little bit different to those that are in other states.

But rental payments are down 5% and 2% in those two cities.

And this is a good thing for renters, of course, because the reason this is happening, and this is me putting on my education cap here, is this is to do with supply and demand.

What we're seeing is we're seeing a lot more properties come on the market that would otherwise not be rented.

So if you own a property that's been vacant or you've let it out for Airbnbs, you know, over the weekends or you put it on stays and you get a bit of money here and there, but it's really just like a second home or you use it as a holiday house.

These people that own these properties are now putting them on rent.

You know, realestate.com or domain or some of these big portals to rent them out permanently because they're like, hey, you know what we can really do with the cash.

But the thing is, this has meant that it's an estimated 100,000 more properties hitting the market for rents.

So at the same time as renters are thinking, maybe I'll just move back home with my parents, we're also seeing more houses come to the market.

And this is what we call a supply and demand imbalance.

And ultimately, in economic theory, what happens is when you have a lot of supply and you don't have as many people trying to live in those houses, the prices must come down.

So you have this what we call an equilibrium.

So we have a lot of houses and we have fewer people wanting to stay, fewer renters.

That would mean that the renter has the bargaining power and can drive prices lower.

And so that's what we're seeing so far.

And you would imagine that if, or at least I imagine, that if prices and house prices come down and interest rates have fallen, some renters will be thinking, you know what, it's my turn now.

I'm going to go on the offensive and I'm going to offer a lower rental payment.