Residents living in Sydney and Melbourne’s central business districts have been hardest hit by COVID-19 job cuts and employment uncertainty, sparking concerns about the fallout on the property and rental markets.
Data compiled by federal treasury shows that inner-city renters are being affected the most by the restrictions aimed at stopping the spread of coronavirus.
Part of the government stimulus package aimed at keeping Australia out of a recession, the JobKeeper payment is made to employers to help cover the wages of their staff in an effort to avoid job losses.
Where are the JobKeeper hotspots?
The treasury recently compiled this list of postcodes with the highest number of businesses who had claimed the payment on behalf of their employees, it showed that 10,290 residents in central Sydney are receiving the JobKeeper payment– the greatest number of any Australian suburb – closely followed by Melbourne CBD with 6693 recipients.
Liverpool in Greater Western Sydney, the collective of Tarneit, Truganina and Hoppers Crossing in Melbourne’s western suburbs and the gateway to Australia’s Great Barrier Reef, Cairns, rounded out the nation’s top five postcodes for workers on JobKeeper payments.
Executive manager of economic research at realestate.com.au, Cameron Kusher, said while suburbs in outlying mortgage belts had been impacted by the pandemic, inner-city areas, in particular strong rental markets, had also been affected.
“We’re seeing those outer, more affordable suburbs quite prevalent [in the data], particularly in Sydney and Melbourne, but it’s also reflected in those inner-city suburbs in the capital cities where there are a very high number of people who are renting,” Mr Kusher said.
The top ten postcodes for JobKeeper claims:
- Sydney CBD (2000) – 10,290
- Melbourne CBD (3000) – 6693
- Liverpool, Casula, Morebank NSW (2170) – 4,000
- Truganina, Melbourne, Tarneit, Hoppers Crossing VIC (3029) – 3,681
- Cairns QLD (4870) – 3,607
- Werribee, Point Cook VIC (3030) – 3,272
- Dandenong VIC (3175) – 3,211
- Brisbane, Spring Hill QLD(4000) – 3,048
- Adelaide SA (5000) – 3,046
- Darlinghurst, Surry Hills NSW (2010) – 2,982
Who is being affected the most by the economic fallout of COVID-19?
Data shows that overwhelmingly it’s younger people that are more likely to be living paycheque-to-paycheque that are most at risk, with some needing to move back home with their parents.
“If we look at job losses through COVID-19 or people being stood down, overwhelmingly it’s been younger people,” explained Mr Kusher.
“If we look at places like Sydney CBD, Melbourne CBD, Brisbane CBD, Adelaide CBD, Darlinghurst, Surry Hills and even Richmond and Burnley in Victoria, you do have a higher number of people renting in those suburbs.”
Tenants Victoria community engagement director, Farah Farouque, said federal government income supports had provided a buffer for people navigating coronavirus lockdowns.
“JobKeeper is a key component of the support available for renters and we know renters are over-represented in hard-hit areas of our economy such as hospitality and retail,” Ms Farouque said.
What’s the fallout for the property market during COVID-19?
The rental market is currently being most affected by the global pandemic as physical distancing measures aimed at slowing the spread force many businesses to shut down.
“The pandemic has taken a huge toll on the household budgets of renters, and many of those who have been impacted by this crisis are young and literally live from pay packet to pay packet – their cupboard of savings is bare,” said Ms Farouque.
“It’s a measure of the crisis that Tenants Victoria has been inundated with urgent inquiries from tenants seeking information from our website and legal advice lines.”
Matthew Cahill, leasing agent at City Residential Real Estate – Docklands, said there was a glut of rental stock in the Melbourne CBD, Southbank and Docklands and were offering incentives to help secure tenants.
“Most landlords are reasonable and are dropping rental prices, and we’re finding those properties are being leased quicker.