Marshall White Property Management
Mid-Year Market Update
As we approach the midway point of 2021, Melbourne’s rental market conditions remain diverse, with significant challenges for owners in the apartment sector.
As we approach the midway point of 2021, Melbourne’s rental market conditions remain diverse, with significant challenges for owners in the apartment sector. Felicity Edwards, Leasing Manager, takes an in depth look at the factors that have led to the current circumstances, and shares her outlook for the remainder of the year.
During the lengthy lockdown of 2020, the demand for all residential property types declined, however, the properties that were leasing were those with extra outdoor space and study areas or extra rooms for working from home.
The supply has been caused by a number of factors; the restriction of immigration and international students, residents leaving for lifestyle areas to work remotely, a decline in interstate migration and more renters becoming homeowners from government incentives and low interest rates. The slowdown in demand has put downward pressure on rent prices and we are seeing renters upsizing from one bedroom apartments to two bedroom apartments for the same rent, representing a drop of up to 20% in some instances as prospective tenants become more accustomed to negotiating lower rents. Many properties reached 100 days on market. Prospective tenants do not search in just one suburb so the choice is vast.
It continues to be a time of challenge in the apartment market sector, currently there are almost 1000 two bedroom apartments for lease in Hawthorn and over 3000 two bedroom apartments in South Yarra. Some of our owners say that their property has never been difficult to lease but we have never experienced market conditions like this before.
Apartments are leasing, however, it is important that early price adjustments occur according to market feedback before the property becomes stale on-line so that we are not chasing the market downwards.
Post lockdown, we have seen two markets emerge, the apartment market which continues to be oversupplied and conversely, the family home market where demand is outweighing supply. This swing in demand is mainly caused by the heated sales market, where family homes are being sold and vendors are becoming renters in a tight rental market for houses.
Moving forward when border restrictions ease and immigration resumes, we expect the demand for apartments to recover but for now it will depend on the effectiveness of the vaccine rollout and the economic confidence of households.
In summary, the best chance of securing renters is to ensure your property is well maintained, competitively priced and has a favourable online presence.
Should you require advice on any aspect of leasing your property, contact our Marshall White Property Management Team for assistance. For more information contact us on (03) 9822 8711.
View our properties available for lease below: