While the market in Sydney and Melbourne is now seeing the downside of their market, over on the other side of the country ie the “West Coast Eagles” side we are finally seeing some real positive signs.
Competition is still the name of the game when it comes to rent levels but there is good news on the horizon. Currently for the Broome sub-region there are 119 properties advertised for lease across all real estate agencies. 59 of these are houses and 60 are units/apartments/Townhouses. As a comparison in 2017 there were approx 165 properties being advertised for lease for the same period.
Our current Vacancy Rate for this week is 3.6% - compared to the vacancy rate for the same time last year was 3.47%. A 3% vacancy rate is the point at which a market is set to be evenly balance between landlords and renters but looking at only the vacancy rate, in any location, can give a distorted version of the rental market and often the northern region of WA can experience a different level of demand compared to Perth and down south. Factors like the number of Days on Market must be considered when comparing the market. Currently our number of days on market is 46.25 days, compared to the number of days on market 2017 which was 54 days.
A good indication of a stabilising rental market is the level of enquiry from Corporate Tenants. The recent demand has significantly increased from the last few years due to corporate tenants gaining more confidence. This demand will mean rents will be increased as well as leases of longer lease terms for 2019. This year we did see some rents starting to increase but that market was short-lived. Given the number of new projects scheduled for 2019 and the very low number of new dwellings built this year we believe there will be a lack of availability of suitable rental accommodation and this will drive rents up. We are already receiving good strong enquiry for rental accommodation and some of this is for January next year already. There has also been an increase in demand for short term accommodation for furnished accommodation.
Attractive stock gets leased quickly but a word of warning - the rental market is still currently a little crowded and is still a competitive market. Investors must ensure their rental property has appeal as quality properties lease quicker with tenants offering rent more than the advertised price. If your property is a unit, it is our recommendation to make these furnished to reduce vacancy periods. If your property is available for rent, ensuring that your property is well Promoted, Presented and Priced as well as it possibly can, will result in a lower vacancy rate and a better tenant!
Refurbishments and upgrades and pricing your property competitively will result in a new tenant which means more money in your pocket. Vacancy and rent reduction are a lot more painful than a rent reduction alone, particularly when the tenant vacating has been a good one so be receptive to negotiate on rents to retain a good tenant for now.
If you would like to discuss the rental potential of your property speak with our Manager of Property Management Services, Charmaine Snow on (08) 9192 2000.