Meet the Market, Instead of Testing It
Within the last week I’ve read conflicting reports about the state of Sydney’s rental market one quoting vacancy rates are down and the other stating the opposite. So what am I and fellow Property Managers seeing on the front line?
Amidst the doom and gloom of a weakening Auction Clearance rates and Median sales prices, for Property Managers of late it’s been business as usual when considering this time of year typically does slow down in terms of availability and lettings.
Looking at the Inner Sydney Market Vacancy rates:
November 2017 – 2.1%
August 2018 – 2.9%
September 2018 – 2.4%
And most recently October 2018 upwards to 2.8%.
So whilst this is a fluctuating market we are at the end of what is typically known as a property boom especially in the Sydney and Melbourne markets.
Despite all of the negative media attention (doom & gloom) I remain quite positive about the assets we manage within Sydney.
There is always a fair bit of hype surrounding vacancy rates but look at the supply that’s coming to the rental market but remembering that the type of supply is not typically suited to all. We still have tenants wanting character filled terraces and art-deco style apartments over new, off the plan high density housing.
Speaking with other Property Managers they feel that properties that good quality properties with attractive features are leasing and especially where the rents reflect the market.
In terms of rents I personally haven’t carried out any increases or tested the market when re letting simply because the market isn’t reflecting an increase. In these cases, it’s seen that minimising vacancy is the highest priority with clients wanting to meet the market instead of testing it. From my conversations with other agents, many are not reviewing or recommending rent increases for current tenancies.
In many cases, first hand and as discussed with other Property Managers, properties can take a week or two longer to lease but it’s not all about dropping rents. Investors can still thrive in this market where logical decisions are being made and the agent does all that they can to ensure every opportunity has been explored.
Just as it is in the sales market, it’s not all about putting a property on the market and opening the door, agents must work harder and go out of their way to achieve results.
A good test of the Sydney rental market and vacancy rates will be in the New Year where rental properties are typically in higher demand, we just need to get through the festive season and later judge if 2019 can bring about any rent increases, otherwise it might be best not to rock the boat.