If the price is right . . .

Rental pres­sure means the mar­ket is sway­ing to­wards the in­ter­ests of tenants, re­ports Giuseppe Tauriello.

The Advertiser - Real Estate - - House Hunter -

THE rental mar­ket re­mains on the side of tenants, with the lat­est Real Es­tate In­sti­tute fig­ures in­di­cat­ing that rental prop­er­ties are sit­ting on the mar­ket longer and pres­sure on rental prices is build­ing.

The met­ro­pol­i­tan va­cancy rate rose to 3.6 per cent in the March quar­ter, from 3.4 per cent in De­cem­ber, while the re­gional rate lifted from 2.8 per cent to 4.4 per cent in the same pe­riod.

‘‘Right across the state, REISA mem­bers are say­ing that the mar­ket has been a lit­tle flat­ter for over 12 months and the level of ac­tiv­ity is not as high as pre­vi­ous years,’’ REISA pres­i­dent Greg Moul­ton says.

‘‘New prop­er­ties for lease are of­ten tak­ing up to four to six weeks to rent, even at the right price, and this is a dis­tinct mar­ket change from tenants strug­gling to se­cure prop­er­ties sev­eral years ago.’’

Mr Moul­ton says pric­ing and lo­ca­tion are crit­i­cal to se­cur­ing ten­ancy.

‘‘In the outer sub­urbs, above $300 makes it a lit­tle slower to lease and closer to the city, we’re see­ing that $350 is gen­er­ally a crit­i­cal price point,’’ he says.

Stead­fast Prop­erty Man­agers prin­ci­pal Mark Les­lie says strik­ing the right bal­ance be­tween retaining a ten­ant and max­imis­ing re­turn is crit­i­cal. ‘‘Gen­er­ally, in the cur­rent mar­ket the crit­i­cal thing is to hang on to your ten­ant,’’ he says.

‘‘A lot of land­lords think it’s bet­ter to get an in­creased rental from a new ten­ant rather than keep their cur­rent ten­ant but new tenants of­ten find lit­tle things they are not happy with – things the orig­i­nal ten­ant would have let go.’’

Mr Les­lie says there are cer­tain met­ro­pol­i­tan ar­eas that are un­der ex­tra rental pres­sure.

‘‘The Bow­den and Bromp­ton ar­eas are flooded as well as ar­eas in the far north, like An­drews Farm and Munno Para,’’ he says.

‘‘These ar­eas have been tar­geted by in­vest­ment groups, try­ing to at­tract peo­ple into ar­eas that are not tra­di­tional ar­eas of Ade­laide.’’

Mr Les­lie says it’s im­por­tant land­lords are pre­pared to meet the mar­ket to en­sure their prop­er­ties re­main oc­cu­pied. To at­tract in­ter­est, he rec­om­mends the use of price ranges when ad­ver­tis­ing.

‘‘Es­pe­cially in the cur­rent mar­ket, land­lords might need to ad­just their ask­ing price and ac­cept a lower of­fer,’’ he says. ‘‘Land­lords should take the op­por­tu­nity to lock in a fixed six­month rental in­crease – it’s im­por­tant this is put into the con­tract and this way they know the rental is head­ing in the right di­rec­tion.’’

The me­dian rental price for met­ro­pol­i­tan houses in­creased $10 in the past 12 months to $325 a week while the me­dian met­ro­pol­i­tan unit rental re­mained un­changed at $275.

In re­gional ar­eas, the me­dian house price rose $20 a week to $250 and the unit rental rose $10 to $190 a week.

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