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Renters experiencing increased competition and challenges
November 26, 2015
Renting is arguably an inevitable fact of life for those living in Australia today. With the national median house price currently sitting at $660, 000*, it is unsurprising that despite government incentives and grants, the average age for a first home buyer is now 38 years old. If one “leaves the nest” post secondary school, it assumes approximately 20 years of renting. Twenty years of not being able to paint or hang art on the walls without adhesive hooks, twenty years of paying a landlord’s mortgage and twenty years of experiencing the intricacies of property managers from bond returns to unexpected inspections and renovations.
As if the day to day difficulties of renting weren’t enough, markets across Australia are indicating that securing a rental property is also becoming increasingly challenging. New data from Real Estate Institute of Queensland’s (REIQ) latest release suggest that the rental market in Queensland is at “historically tight” levels. It reports that Brisbane currently houses a healthy vacancy rate of 2.8% and areas including Caloundra and Noosa report all time low rates of 0.9% which is music to investors’ ears.
Renters and agents beyond Queensland also echo these sentiments of rental challenges. Melbournian renter, Lucy Trickett, reports taking weeks longer than anticipated to secure her last property with her search streaked experiences of attending open for inspections with over 50 other prospective tenants and witnessing interested tenants incentivising not only property managers but current tenants with bribes of food and gifts. “I left an OFI off Brunswick street as another prospective tenant walked in with a gift hamper full of hangover food for the current tenants- coffee, pastries, and a case of beer- that’s how far renters are going to get into a certain area or property”.
iSell real estate agent, Michael Choi, explains that “this year, property prices have increased rapidly meaning many families couldn’t buy so they decided to rent for a little longer and save up more deposit. The unfortunate irony is that while they were paying rent they’ve been finding it a lot hard to save and by the time buyers save up 10% the market moved up”. Consequently, Choi says, the average Australian is needing to save up more or compromise on his or her preference of suburb and move further away from the city to more affordable areas to buy.
Real Estate Institute of Victoria (REIV) CEO, Enzo Raimondo, confirms that “this growth in prices has made it more challenging in some areas for homebuyers to secure their preferred property,” he said. “The best advice I can give is that those wanting to buy take time to do as much research as possible. This includes talking to local agents and other residents, to find the best location they can at the best price for them. The other tip is to start with a smaller property, and build up from there. This may help renters to break out of the ‘rental cycle’, and will certainly stand all homebuyers in good stead during a property search.”
Are you a renter? Or investor that rents out property? Do you feel that it has become more or less competitive? Share your experiences and thoughts below.