RENTAL YIELDS IMPROVE WITH LOW VACANCY RATES
RENTAL YIELDS IMPROVE WITH LOW VACANCY RATES

After years of falling rental yields and high, COVID-19 pandemic-influenced vacancy rates in capital cities such as Sydney and Melbourne, the pendulum has swung and it is now a property investors market in some parts of Australia.

This means a majority of property investors are now seeing greater benefits as a result of high demand and tight supply levels within some parts of the rental market. So, after a few years of lower rents, Rental Providers are now seeing increased rental income.

New figures from CoreLogic have found that in the year ending June, the capital city and regional rents have risen by 9.1% and 10.8% respectively, a positive sign for property investors who are also able to command a higher price for their property, should they choose to sell.

 

Related Articles

Rental Market Crisis Spurred By a Lack of Housing
How Can You Prevent Delays When Applying For a Rental Property
Obligatory Safety Checks For Rental Properties

 

Request a market appraisal banner

 

Demand for vacancies is booming

Demand is currently booming in the rental market across the nation as factors such as overseas migration, the return of international students and the easing of COVID-19 restrictions add pressure to the market. As such, renters are willing to pay more to secure a suitable property and this increased demand enables property owners to filter applicants and select higher-quality renters.

The low vacancy rates recorded across the country are partly due to the behavior of property investors, who have been selling a property more frequently than buying, causing the rental pool to shrink.

 

September Market Update

According to SQM Research, the vacancy rate across the country decreased from 1.7% to 1.0% over the past year, which equates to one vacancy for every 100 rental properties. With Sydney and Melbourne still recording vacancy rates of just over 1.50%, it’s the remaining six capital cities that have vacancy rates below 1.0%, signifying the challenging conditions across the nation for renters.

 

Renters flocking to regional Australia

Like many homeowners, renters sought a lifestyle change during and after lockdown. Changing working conditions have also contributed to the demand, as more people are working from home or seeking a property with fewer housemates to reduce the spread of COVID-19. As such, the rental market has faced pressures from all areas of the country, meaning that Rental Providers everywhere can benefit from these changing conditions.

 

24 Temple Road, Belgrave SouthSemi-rural retreat at 24 Temple Road, Belgrave South

 

The current Rental Providers market is a positive sign for property investors, who are now benefiting from increased rental income, yield, and a greater pool of applicants from which to choose.

 

Learn more about First National Neilson Partners Property Management

 

Ask your property manager for advice

While the market is prone to fluctuations, owners should consult with their property manager about the current market and assess their rental income against the overall yield.

 

Contact us CTA

 

In some cases, it may well be time to increase the rent but it’s always important to consider the value of holding on to good, long-term renters.

With interest rates and inflation on the rise, many Rental Providers are wanting to review the rent they are asking but, as always, we recommend investors speak to your property manager for an appraisal of your specific situation.

A balanced approach may be a better option when considering vacancy periods, reletting fees, advertising costs, etc if a dramatic rent rise forces your renter to seek alternative accommodation. Whilst application numbers can be high, so can the number of applicants that just do not meet the criteria that investors and First National Neilson Partners expect and are ultimately declined.

 

Listings for sale

 

Request a market appraisal banner

HOW TO CREATE A SUSTAINABLE HOME
about 1 year ago
Share
Home buyers and renters are increasingly aware that not only are they doing their bit for the environment when opting for sustainability at home but they’re also reducing the ever-increasing cost of energy bills as we work towards Net Zero homes. ... more