Property management Geelong – A year in review
As 2015 draws to a close we can take the time to reflect the property market from a rental perspective.
Three years ago rental yields were at an all time high and in my years as property manager I had not seen such high rents, with demand pushing them even higher.
Turn to 2015 and the market suddenly turned. Falling interest rates made property investment very attractive with current and future tenants venturing into the property market.
Great news for home buyers and investors, but the result has been a lowering of rental prices and demand.
As tenants vacated, landlords were having to be educated on the current state of the local market. Those who heeded the advice of their property manager leased their properties at a lower rate, a lower income as opposed to no income.
Those who haven’t listened, have had their properties vacant for much longer. Mid year with average days of rental property being on the market was 48 days, with some improvement as the year draws to a close.
The average rent in 2015 has decreased between 10-20%, in dollar terms, that is anything from a $30-$100 per week, price drop.
Prospective tenants in 2015 have been inspecting properties on the rental market multiple times and submitting their applications two or three weeks later. Tenants have had the advantage of comparing all properties knowing that the property will be on the market for some time.
Some investors have overcome this by improving their property, (such as painting), thereby giving their property a competitive edge.
In conclusion, 2015 has seen a decrease in pricing and demand, with low interest rates a contributing factor. The market has become favourable to the tenant in regard to selection of property. Landlords who have made appropriate changes to rent and improvements to their property have leased their properties.
Landlords, current and future, if you are unsure about the rental market, call in to see your property manager for advice.