More of the same or every kind of different?
by Richard Thurtle
When you operate in the 6157 postcode, and it’s the beginning of a new year, you can be sure things will be busy.
The local primary schools in the area have developed such an enviable reputation that people simply want ‘in’, and that reflects in the flurry of activity we’ve had in the area as 2017 has switched into top gear.
We’ve seen over twenty properties leased in quick time as new families have come into the area to prepare for the new school year. It’s not the only motivation for people coming into the area, but it’s certainly been the largest single factor.
Others are taking advantage of the prevailing market conditions and moving to a larger family home for a similar weekly rent to that which they were already paying.
Some of these new properties that we’ve been given have been from new managements, others from existing vacancies being filled.
In a relatively stable market, spikes like these are few and far between. Volatility is the domain of the upswings and the downswings, not the flatlands of stability.
It’s tempting to think, on the face of it, that little is happening in the current residential leasing market. Depending on which side of the leasing agreement you sit, there’s plenty happening: mostly good or mostly bad!
Trust me, as someone in the industry, nothing could be further from the truth.
Corrections don’t happen overnight. Even the conditions which are the catalyst for those corrections come over time. It’s tempting to think that the present circumstances have been around for a while, and surely things are about to change. The truer reality is that many of the reverberations of those conditions are still playing out as people vacate properties or re-sign lease agreements.
Some are only just feeling the sting or the joy of the market’s muted conditions, yet our vacancy rate remains around the metropolitan average, nudging 7%. And it has for some time now.
From a broader market perspective, the median rent is also muted - around $360/week, with the number of properties available for lease on the residential market hovering around 10,000 properties.
We don’t see market conditions moving significantly through 2017. Supply of product is strong; we have to work harder than ever with our landlords to give incentives to new tenants through home improvements, rent-free periods and rent reductions. As much as we’d love to see those conditions changing for our landlords, it’s highly unlikely in the short term.
We’re continuing to see an alignment of the expectations of property owners with the reality of the market. It’s no secret, this is tough medicine to swallow, but so is a property that’s on the long-term vacant list!
If you’re in the rental market right now then there is no doubt, there are some big wins to be enjoyed for tenants. For owners, though, it’s just a little cloudy with the weather outlook ‘continuing cloudy’. This is not a time to drop the bundle, but to work to lighten the load by aligning with the current market and cutting your cloth accordingly.
As always, if you have a property to manage, we’re here - adapted to the current conditions and ready to show you the One way to manage!