Rent keeps on rising
Landlords hike prices as demand for property increases
RENT prices have increased in the past three months in 41 suburbs just as Geelong heads into the peak demand season for properties.
New PropTrack data tracking median asking rents for private houses and units showed landlords increased prices as much as $38 a week across the region.
The September quarter rises cemented annual increases as high as 21 per cent.
The biggest jump was in Drysdale, where houses had a $478 a week median asking rent – up $38 – and the suburb of Geelong, where the median rent climbed to $500.
St Albans Park saw the biggest rise for units, with a $20 a week bump to a $370 median, with similar rises in Lara and South Geelong.
Rents were unchanged in 22 suburbs, while prices dropped in 12.
Landlords can raise rents once every 12 months for leased properties, but can set new prices when they are vacant.
Compton Green Geelong leasing and business development manager Alison Pekin said October through to March was traditionally the busiest period for rental demand.
“Many people want to move before Christmas or before the school year starts,” she said.
“That’s not just families with school kids, that’s university staff. A lot of people who are on contracts will start around the December, January, February time frame.
“Also Barwon Health is another big influence because of all the registrars doing their rotations starting during that period.”
Rising costs for investors through interest rates and a March deadline for new minimum standards for homes are tipping the supply balance.
“With the changes to legislation and the new compliance requirements, we are finding there are some investors with older properties that don’t want to upgrade their properties,” Ms Pekin said.
“So there are a few going on the sale market now.
“The tight rental market is somewhat caused due to these properties being sold to owneroccupiers and it’s not necessarily investors buying them back again.
“So there is a situation where supply is being out stripped by demand.”
Ms Pekin said there had been media hype about a lack of properties.
“However we still have good-quality properties in Geelong and a supply of quality renters to take them” she said.
Around 600 homes are available for rent in the Geelong region on realestate.com.au.
Harcourts North Geelong director Joe Grgic said investors were pulling back as interest rates rose, weakening rental supply in the short term.
“I do see though in the longer term there are many first-home buyers who got into the market with grants and they’ve been looking out for 12 months so they can rent out their property and move back in with mum and dad or they may be ‘rent-vestors’,” he said.
Mr Grgic said demand had eased, but people were still missing out on homes.
“We’re still getting two, three, four applicants for one property and they’re good applicants, which means only
one person can get it.”
Gartland Geelong agent Nathan Ashton said increasing holding costs, particularly for properties bought or built on loans where fixed interest terms were about to expire, could see more properties attractive for investors become available.
“Holding costs have increased exponentially,” he said.
Mr Ashton said more investors had come back on to the market in the past couple of weeks, particularly as prices had balanced out and potential rental yields improved, but won’t be rushed into making decisions in a buyers market.