Rental Vacancies Rise In Some Regions As The Rental Market Becomes More Diverse
In This Week's How's The Market | Edition 42
Rental Vacancies Rise In Some Regions As The Rental Market Becomes More Diverse
Desperate Times, Desperate Measures
7 Bidders Fight Over $20m Listing In Toorak
Rental Vacancies Rise In Some Regions As The Rental Market Becomes More Diverse
Over the last 12 months, we have seen some of the fastest rental increases on record across all major capital cities.
Initially sparked by Covid, the Zoom-Boom and the flee from the capital cities, regional rental markets exploded as capital city rental markets initially struggled in the early stages of Covid - with Melbourne being affected the worst due to the lengthy lockdowns.
Over the last 12 months, however, the rental crisis has taken a different turn. Interest rates have made purchasing less accessible for many, there is a general sentiment of fear cast over house and land packages as many major builders are going bust and many investors are selling their properties to cash out, avoid the high-interest rates and avoid paying the sometimes expensive renovations required to meet new rental laws. On top of this, Covid is now less of a problem in the community and many businesses are moving back into the city.
This has resulted in a big shift back towards the capital cities of Sydney & Melbourne and reduced rental demand in many regional centres and smaller cities including Hobart which can be seen below.
Some regional markets are now getting back up to 3% vacancy rates which are high compared to Covid vacancies, but what has been considered a healthy rental market in standard times.
Unfortunately for tenants, this increase in vacancy may be short-lived as overseas migration is still forecasted to be higher than new builds and new supply which will continue to put a squeeze on the rental markets for the foreseeable future.
What The Agents Are Saying
Desperate times, desperate measures.
Over the last few weeks, new listings have been especially low. This is due to the school holidays and Easter predominantly as agents don’t want to list properties during the holiday season as many potential buyers could be away or busy.
However, agents across Melbourne have been surprised to see high numbers at opens across this period as stock is still so low and buyers are desperate to find the right home.
As headlines have begun to change recently to forecast that we are at the bottom of the housing market, sentiment is also beginning to change on the ground which has been reflected by agents reviewing last Saturday's opens with me.
Many real estate agents are now also repeatedly chasing and looking for work as listings are low and times for smaller agents with fewer listings may be becoming dire.
The Geelong market is still moving slowly with fewer buyers through their properties, but good properties are still transacting quickly as the buyers that are coming tend to be serious and know a good deal when they see one.
One of the good agents in this market transacted on four properties last week with one of these properties only having two opens.
The Wow Factor!
33 Lansell Road, Toorak, Vic 3142
This property sold on the weekend just gone within the quoted range of $20m - $22m with 7 bidders fighting it out over the beautiful Federations Queen Anne-styled architecture on 3582m2 of one of Tooraks best streets.
“Rich in original features including a conical tower, terra cotta roof tiles, high decorative ceilings, a central domed skylight, and stunning original lead lighting and fireplaces throughout.”
In The Media
Sydney, Melbourne housing markets have bottomed
An example of how quickly the media can change their tune.
Just weeks ago they were predicting how the fixed interest rate cliffs were going to topple the market and that we were in the ‘eye of the storm’. Got to love the media.
Final Thoughts
Whilst vacancy rates have shown a slight recovery this month, the fundamentals unfortunately still show a different story for renters with increased rental demand and pressures due to continue into the foreseeable future.
This will convert into increased demand for homeownership with some of the renters that can afford it making the shift.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is my opinion, please seek your own expert advice when making decisions.
