Home Insights Where Are All The Rentals? Why Tenants Have Such Little Choice

Where Are All The Rentals? Why Tenants Have Such Little Choice

by admin
0 comment

January is usually the busiest time in the rental market. It’s a month when more renters are considering moving. In other words, many lessees are on the market.

In our estimate, January usually has about 16% more new rentals than the average month..

However, this year, while supply levels have recovered from the traditional quiet December decline, new rentals are lower than before COVID and less than in the recent January period.

New rental properties increased by 38.9% month-on-month in the entire capital and increased by 23.2% in rural areas. This is pretty much in line with the kind of bounce you normally see in January, as you get out of the year-end break.

However, new rental properties in the capital are still down 13.8% in January this year from January last year and 16.9% down from January 2020.

This affects lessees in all capitals.

In Sydney, rents on the market in January this year are 15.7% less than they were two years ago, while in Brisbane they are 24.6% less. Although the decline in major capitals is the slowest in Melbourne, the number of new rentals on the market is still down 4.7% in January this year compared to January 2020.

The slow start this year is the continuation of the COVID trend towards lower churn rates in the rental market.

You can see this trend more clearly by viewing new rental properties after considering predictable seasonal fluctuations.

Of course this is not important For lessors – The actual number of rentals is what they are looking for. However, examining predictable seasonal fluctuations is a useful way to understand market trends and momentum.

The trend in the COVID era is clear: if we remove the predictable seasonal fluctuations, the rental market sales will decline.

There are several hypotheses that can explain this trend.

First, the churn rate in the rental market is declining.

New rental properties will be on the market when an existing tenant moves out (or when a new home is rented). The less people travel due to blockades and social distances, the less rents are on the market.

There is some evidence to support this hypothesis. Searches for rental properties usually surge in January at realestate.com.au. This is because the market churn rate is increasing and existing tenants are moving out to look for new rental properties.

The number of rental searches has increased this year, but less than in the last few years. This is consistent with fewer people moving and fewer churn.

Second, the borders are still closed to many, and we did not have international students coming to Australia in January to start the school year as usual. Usually, these students have leases that expire at the beginning of the year and bring their list back to the market.

Third, Rent supply is low and demand remains strongIt is reasonable to expect that some real estate managers could find a vacant rental property tenant without being listed.

Lastly, Number of landlords who have sold out their investment property.. This trend will reduce the inventory of properties that can be rented.

With the risk of reopening borders and weakening the COVID blockade, people may move again throughout 2022 and return to the national rent market.

You may also like