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