Rental prices have dropped in most European cities according to the latest international rent index, with the effects of the coronavirus-related travel ban, implemented from mid-March, now fully revealed.
Perhaps unsurprisingly, the index shows cities less impacted by Covid-19 showing smaller drops in rental prices.
Italian cities recorded the biggest drops in rental prices of all cities.
Milan, the capital of Lombardy and the region where the coronavirus hit the country the hardest, recorded the biggest decreases in rent of all cities, the index shows.
Compared to the previous quarter, one-bedroom apartments dropped by -7,8 per cent to €1,096 per month in Milan. This is a drop of 4.6 per cent compared to the second quarter of 2019.
The index, released by HousingAnywhere a rental accommodation platform across 60 countries, found that Barcelona and Berlin were among the European cities to record a decline when compared to the second half of 2019.
|City||Q1 2020||Q2 2020||Q1-Q2 %||Q2 YoY%|
^ In ascending order, by sum of Q2-Q3% within city. Source: HousingAnywhere.
The northern Italian city of Turin recorded a quarterly drop of -7.8 per cent for one-bedroom apartments to €812 per month.
And in Florence, rental prices for one-bedroom apartments dropped by -6.9 per cent to €918, down 4.6 per cent compared to 2019.
The index, which analysed 102,890 properties listed on the platform between April 2019 and June 2020, shows that prices for rooms have dropped more compared to apartment and studio prices due to local demand, and also found that tenants are looking for better quality apartments or upgrades from their current places.
“We currently see a tenants’ market, where supply outnumbers demand,” HousingAnywhere chief executive Djordy Seelmann said.
“Whether demand will recover, depends on when and to what degree international mobility will return.
“With a second wave looming, the international rental market remains turbulent,” Seelmann said.
“While international student numbers are expected to drop in the upcoming academic year, educational institutions expect programs to return to normality by January 2021.”
Despite the rental market shifting towards tenants, Seelmann says many university cities still have a housing shortage.
“With the blended approach universities have announced for September, and the high number of enrolments European universities are expecting in January 2021, it remains to be seen how long rental prices will stay at this level or even start increasing again,” he said.
With unemployment on the rise, housing unaffordability across the globe has been compounded by Covid-19.
In Australia, the latest ANZ Corelogic housing affordability report shows increasing supply levels of properties is making it cheaper to rent in major cities Sydney and Melbourne.
The report shows advertised rental properties increased by 57 per cent in inner Melbourne, while Sydney's city and inner south both recorded a rise of 53 per cent between the period of March and June.
The affordability report noted that the fall in demand for rental properties in inner Melbourne and Sydney was due to their "service economies", impacting people working in industries hardest hit by the pandemic as also most likely to rent.