In the residential real estate market, we see an annual slump in the activity of purchasers and prospective tenants as the tinsel begins to line the eves and we wind down for the festive season. It is around this time that people begin delaying things for next year so it is best to understand the impacts.
Finding a tenant
There is no worse time to have a vacant property than December and January. Inconveniently, this also tends to be when many development projects are completed and ready to begin the process of finding a tenant. In an unfortunate scenario, having a tenant vacate in mid-December could potentially leave you dry until Australia Day.
This holiday vacancy spike is experienced across the country, including the four major cities (Sydney, Melbourne, Brisbane and Perth). The vacancy rate can increase by more than one per cent within a matter of weeks, which could temporarily push the market into oversupply and cause downward pressure on the asking rent.
By Easter the rental market tends to reach its lower levels of vacancy, which means that on average this would be one of the ideal periods through the year to advertise. There are more exceptions to this rule than there are for the rule, though, so it pays to have a decent property manager.
The right property manager
The profession of property management is not immune to the plights of every other profession: there are great ones, there are terrible ones, and there are many in between. Sadly, some property management businesses do not take their work very seriously and employ cheap, poorly qualified and lacklustre staff to run the portfolio.
If you are noticing your property taking longer than the rest of the market to get a tenant, as well as accompanying excuses like oversupply or the lower quality of your property against others, it is time to start asking some questions. It is important your property manager understands the local market, including the other properties your potential tenants are viewing and the unique characteristics of the local area. As an example, in Bondi July has double the vacancies of December which is a direct reflection of the beach lifestyle.
Try to not be too tough on your property manager, though, as many rental markets across the country have been significantly affected by the drop of interest rates. We recently wrote a blog post on the relationship between interest rates and rental incomes which you can find via the link below:
From the team at Blue Wealth Property, merry Christmas and happy new year!