As the country begins to return to relative normality and living with COVID is now the preferred approach to its management, every segment of the economy, including the real estate industry, is now assessing the effect of the inevitable changes that have taken place. Government emergency measures to protect tenants from eviction have been revoked and this is just one trend that is affecting the property market.
Inflation and Rising Interest Rates Affecting the Market
Some others are the increased uptake of the option to work from home, movement by workers in the eastern states from the cities to regional centres and a shortage in all states of housing stock. An additional pressure, not only here but world-wide, is rising inflation as well as current moves by our Reserve Bank to increase interest rates from an historic low base.
The Law of Supply and Demand in Action
The effect of these economic trends on tenants looking for suitable rentals in the current market is very difficult, with vacancies the lowest in approximately 40 years. The REIWA defines a balanced rental market as a vacancy rate of 2.5 to 3.5 per cent, but the vacancy rate this time last year was 0.7 per cent with little improvement since. In economic terms, this is a classic example of the law of supply and demand at work.
Not Every Prospective Tenant is a Good One
In this unusual market, property owners looking for tenants have no shortage of applicants but finding the right tenant for their properly as quickly as possible is still not easy. Getting the wrong tenant can lead to expensive property damage, rental arrears that may impact the owner’s ability to service a mortgage and unexpected vacancies if the tenant suddenly leaves.
Fast Tracking a Tenant Not a Good Idea
Selecting a tenant is time consuming if done well. It is also a two-way street. To attract the best tenants, the property itself should be clean, tidy and well-maintained with good services. It does not have to be palatial, but it should appear looked after, so the tenants will look after it too. Reference checking is vital to eliminate prospective tenants who have a poor rental history.
The best way to find a tenant quickly is to appoint a property manager to handle all the details. Here at Bunbury Real Estate, we have experienced professional staff with the skills and tools to keep your property occupied with good quality tenants.
We have access to industry information, enabling accurate background checks on rental, credit and criminal history, visa status where appropriate, and other processes. We also manage all tenant communications and perform regular property inspections to ensure that your property is kept in good condition.