With international borders closing and a corresponding lack of tourist demand, Covid saw many short-stay rentals flooding the existing long-term rental market.
Now well and truly past the bulk of Covid restrictions, this trend is fast reversing, tightening up the long-term rental market and leading to a growing rental crisis in some areas of Australia.
This is reflected in the latest data from CoreLogic, which shows that – at a macro level – rents are rising at above average rates, peaking at 9.4% in November last year and sitting at 8.7% for the twelve months ending March 2022.
APARTMENT LIVING BY CHOICE
And with one in ten Australians now actively choosing to live in apartments, CoreLogic data also points to stronger conditions in the medium to high density rental sector. This has seen the rate of growth in unit rents strengthening to reach a cyclical high of 3 per cent in the March 2022 quarter (actually outpacing house rents which came in at 2.4 per cent for the same period).
Perhaps not unexpectedly, the strongest overall quarterly rental growth was recorded in Brisbane at 2.6 per cent, closely followed by Sydney at 2.3 per cent. Meanwhile, Adelaide remains Australia’s cheapest capital city with typical dwelling rents of $440 per week, compared to Canberra with the most expensive at $633 per week.
INVESTORS OUT IN FORCE
And with Australia's official cash rate remaining on hold at the record-low level of 0.1 per cent, and Australian home prices soaring by 23.7 per cent across 2021, investors are out in force, ensuring competition remains intense.
The hottest segment of the market sits between $400,000 and $600,000, with sales being secured in record time. Take note, unless you’re searching outside a capital city, we’re again talking about apartments in this price range.
With rental affordability set to tighten further, the demand for apartments – as an investment vehicle and a more affordable choice for renters – is only set to rise.
WHAT DOES THIS MEAN FOR LANDLORDS AND RENTAL PROVIDERS?
Strong markets make for increasing rents, and this is an important part of the service that our Director of Property Management, Renee Whitehouse, is carefully managing for landlords.
“Rents have risen post-Covid, but – depending on the location and quality of the property – they have a way to go until they are back to where they used to be. As part of our standard procedure, before issuing new rental agreements we conduct a rental appraisal, so we know what similar properties in the area are being leased for. This ensures that we strike a balance between achieving and maintaining the very highest rent at the fastest possible pace, while not alienating good tenants or having a high turnover rate with corresponding vacancies. Most of our owners are happy to factor in increases as we offer tenants new leases,” says Ms Whitehouse.
INVESTING IN A GOOD PROPERTY MANAGER
Along with being on top of current legislation, organising maintenance and repairs and conducting routine inspections – a good property manager means that you will always keep pace with the market. They not only take care of all the things you don’t have time to do, they also help you find and secure the best tenants and maximise the return on your investment.
And that’s exactly why you should book in for a free rental appraisal on your property today! Even better, our premium service is designed to lay down solid foundations, protect your property portfolio and ensure your long-term financial security.
Click here to learn more.
