There were 724 auctions over the weekend resulting in a clearance rate of 80%. 438 sold at auction, 141 before auction and 145 passed in. There were an additional 176 private sales. These numbers are well down from 1,232 last week and 1,732 for the same time last year (however these numbers were high due to a snap lockdown in February).
There is finally some good news for landlords in which many struggled through 2020-2021 due to some tenants employment struggles. This resulted in decreased rental incomes and increased vacancy rates (and longer lease times) and then on top of that, the government amended the Residential Tenancies Act which introduced tougher, new laws to protect the rights of tenants.
It now appears the wheels are turning with rental incomes rising and vacancy rates dropping. Tenants in Metro Melbourne and Regional Victoria are feeling the pinch as landlords seek to increase rents back to pre-pandemic levels. According to the new Residential Tenancies Act, rents are only allowed to increase once a year which could explain in some cases, landlords have opted to increase the rent significantly rather than a staggered approach which was previously allowed two rental increases in a twelve month period. As a result though, we are hearing reports of some tenants vacating properties due to the rent rises to seek cheaper accommodation.
According to Domain, there is a national trend of vacancy rates falling across the country with Melbourne’s vacancy rate down from 4.4 per cent in February 2021 to 2.1 per cent last month. This has resulted from an increase in rental demand and drop in supply. Some landlords have sold due to hardship through 2020-2021 with unstable tenant incomes and also new requirements introduced by law for properties to be kept to a minimum standard. This has required some landlords having to do works to their property which otherwise they would not have which in turn has increased the running costs of these properties. Some landlords have also put their properties back on the holiday rental market as international and domestic borders opened. I am expecting this declining trend to continue throughout the year and as a company, we are seeing properties generally lease out faster and our vacancy rate has been at its lowest level in at least a couple of years. The REIV reported the vacancy rate for Ballarat to be at 1.1% and Geelong 1.6%.
A renovated, three bedroom, two bathroom, villa unit at 61A Roslyn Street, Brighton went under the hammer on Saturday. The advertised price prior to auction was $1,700,000 – $1,800,000 and four bidders participated pushing the end sale to $2,150,000 which was well above the price where the property was announced on the market at $1,950,000 (however the property could have hit its reserve well before then).
Have a great week.