Currently we are seeing the rental market softly decline, with rental inquiries well down from the previous quarter. As stated by REISA President Greg Moulton “Some regional areas are finding it particularly tough which is often found when the State hits harder economic times. We are also finding that the rental market climate is more closely aligned with the sales market than normal.”
“Typically, when sales are down, rentals are up and vice-versa, but at the moment, we are seeing a slow economy and so people are holding tight to wait and see what happens over the coming months.”
Moulton said properties priced over the $350 per week mark in the metropolitan area are the properties that are hardest to move.
“REISA members are saying houses and units which are priced between $250-$300 are snapped up quickly and $350 is generally the line which really makes tenants think twice.
“We are also finding that landlords are often having to drop their asking rate a little to meet the market and tenant the property, so we are not seeing substantial movement in rental rates at the moment,” he concluded.
Evidence gathered from Southgate Property Management supports Moultons statement. The suburb hardest hit in our portfolio has been Aldinga Beach with tenants spoilt for choice. The rapid development of this area has seen large numbers of investors buy or build in the suburb in recent times, creating an oversupply of investment properties in the area. This has forced rental prices down as investors compete with one another to tenant their properties.
We expect that as development slows in the area, and population growth continues, this imbalance will begin to level.
Additionally we are seeing astute investors take advantage of the slow sales climate and build their portfolio with excellent investment opportunities available.
If you are considering purchasing an investment property, please don’t hesitate to contact me on 0407 729 998 for an obligation free rental appraisal on any prospective purchase.