- Posted By Jasmine Adams
We are now starting to see the vacancy rate start to creep up from 1.5% to now over 3% which means the rental supply of property is more than the demand for rental properties. This increase is mainly due to the fact that the rate of enquiry is now significantly reduced and furthermore as we experience more hotter weather in the next few months, the vacancy rate will further increase. Yes it is true the weather will have a direct bearing on Broome’s rental cycle. Not only does the vacancy rate rise and the number of days on market is extended when it gets hot, but we also see an increase of requests from tenants to “break lease” which only exacerbates the situation.
A Break lease is where a tenant requests to vacate even though the fixed term has not yet ended and unfortunately occur for a variety of reasons like job transfers, hours of current work reduced so tenant cannot afford to pay rent, a change of plan and tenant wants to leave etc. When it comes to ‘break lease’ scenarios, some tenants intend to vacate quickly; others give lots of forewarning; and others will stay until a new tenancy is secured and then organise themselves to vacate beforehand. Regardless break leases unfortunately puts pressure on the rising vacancy market as it means more properties to compete with vacant properties. A break lease property is not reflect in the vacancy rate as it is not technically vacant. In break lease situations owners feel disappointed to be losing their tenant before the end of the signed agreement. This does not mean the tenant can expect to simply walk away from a fixed term tenancy without any further financial obligations. Interestingly the Residential Tenancy Act does not specify break lease charges but in Common Law a breach of contract does allows for compensation (damages) to be paid.
If you are wondering when is the best time to have a lease expire we would always recommend (where possible) to have a lease coming up for renewal usually just before school holidays if it is a house and more particularly in between the March to July period. Late January is also a very busy leasing month (weather permitting) as often new people are moving to Broome for the start of the school year.
If you are also wondering what can you do to protect yourself and your rental funds check the fine print on your Insurance policy to make sure it includes Landlord Protection Insurance. If not then seriously consider it. This helps take off the pressure when there is break lease situation as you are generally covered.