Auctions are back, properties selling above quoted ranges, easing of restrictions will allow 20 people at an open for inspection and auction as of 1st June 2020, increased confidence and the rental market is rebounding. These are all what was experienced by my team over the weekend with signs that we are heading towards a more normal Melbourne property market.
The clearance rate over the weekend was 82% on a low volume of 109 auctions, so not a true reflection of the market. There was an increase in private sales this week to 218, a significant increase from last week. We are still at volumes below 50% of last year but over the next few months I am expecting this to increase.
The rental market has certainly taken a battering over the past 10 weeks. At the start of the Covid-19 pandemic in Australia, people were not wanting to move which caused an instant lack of demand in rental properties. In addition to that, some tenants were losing their jobs and there was a lot of uncertainty about pretty much everything. The government was also providing confusing messages about tenants and landlords rights.
As tenants starting losing their jobs, our property managers were inundated with requests of rent reductions and deferments and in turn started to panic some of our landlords. We quickly had to implement strict guidelines in order to fairly manage these requests and result in a fair outcome for all involved.
In order for a tenant to apply for rent reduction/deferment, we requested evidence of financial hardship. A tenant simply losing their job was not enough to qualify for a discount. A tenant must have also demonstrated they have an inability to pay their rent which also included proving a lack of cash savings. It was found after we requested a formal application that many still had the ability to pay their rent due to cash savings and eligibility for JobSeeker or JobKeeper payments.
This resulted far less rental reduction requests than we were expecting, with only 1 in 15 properties having to lessen their rent due to tenants financial hardship. Our rental departments’ vacancy rate did increase marginally through the peak of the pandemic to around 4% but this has now dropped back to around 2%.
Over the weekend, we saw great turnouts to our open for inspections for almost all of our properties and I have just been informed by my team that most of our ‘for lease’ properties have received tenant applications on them.
In summary, we have certainly seen a shift in the demand for rental properties over the past two weeks, and although there are more properties up for lease than usual, the days it is taking to lease them out is on the decline.
Have a wonderful week.
As a landlord, you have the responsibility of ensuring that the smoke alarms at your rental property are in working order. All properties are required by law to have a fitted smoke alarm. We will take care of this for you! Once a year we arrange for smoke alarm services to be carried out, to ensure they are operating correctly.
Smoke alarms are a vital part of a property, it can save lives and reduce damage to a property. With this in mind, it is extremely important to have smoke alarms up to date and functional.
As your Property Managers, we organise this service for you and liaise with the tenants to ensure that it is checked annually. Rest assured that your property and your tenants are safe and have the early warning of a smoke alarm to rely on.
Rosie Lewis – Elite Property Rentals
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