Queensland’s Rental Market: Down but Not Out
The message for landlords with vacant properties or un-renewed leases is simple: don’t panic. With the imperative being to stay home, now more than ever people need a place to live. Of course with the rise of unemployment, some renters are finding themselves temporarily moving back into the family home or staying with friends. However, while there may be a decrease in tenant activity at this time, it hasn’t flat-lined.
Clint Dowdell-Smith, General Manager at Bees Nees City Realty, noted that despite the reduction in total tenant enquiries, those who are showing an interest tend to be more serious applicants – and technology is to thank for that. “Tenants are really engaging with everybody using more technology during these times to check out available properties, so we’re getting a lot more qualified leads,” he says. “We’ve been doing video walkthroughs since the COVID-19 restrictions started and it’s allowing people to ensure that the property is going to suit them. Instead of just running out to do an open home and having five or six groups come through who then say it’s not for them, we’re getting private inspections from people who are really interested in the property.”
As for what it is that might drive somebody to find a new rental during uncertain times, Dowdell-Smith has a few theories. “Some have already previously committed to vacate, so prior to all the shutdowns and restrictions another tenant would have already been found, signed up and is ready to move into that property, so unfortunately they’re then committed to moving,” he explains. Other tenants, he says, may be needing to downsize temporarily during this financial hardship, and so those people too are actively searching for rentals.
“There are also a lot of share households out there with a lot of people suddenly forced to spend a lot more time with each other in small apartments,” Dowdell-Smith adds. “They might be thinking ‘if this is going to go on for months, I need my own place,’ so there could be more enquiries from people with that perspective as well.”
Still, the reality of the situation is that vacancy rates will likely increase because some tenants will be forced to temporarily leave the market and more properties will enter the long-term pool due the inability to find short-term tenants. “We’ve seen a reduction of tenant inquiries so that has to have a flow-on effect for the properties that are sitting vacant now,” says Dowdell-Smith. “There has to be an increase in vacancy rates, but I don’t think it’s going to double or triple or anything like that.”
An increasing vacancy rate could see the cost of rent reducing as landlords struggle to find tenants, which of course will make the option of renting much more feasible for anyone struggling financially in the current crisis. “There are pros and cons for all of it,” continues Dowdell-Smith, “and there are benefits there for tenants as well.”