Just as The Advertiser reported Hayley O’Loughlin and Kyle Clayson, applying for about 70 rental properties and being unsuccessful because of rising rents and stiff competition, so many other families face the same situation in a fiercely contested rental market.
In the article I confirmed, “the situation for new renters across the state was “dire”, particularly in the lower end of the market.”
“There’s not enough public housing available, but that has been a big problem for a number of years.”
“We also have investors selling out of the market and an increase in rent over the past two years. It’s grossly unfair to a lot of people who cannot find housing. I’ve been in this industry for almost 30 years and I’ve never seen the competition like this.”
Public opinion seems divided, with feelings of empathy for the young couple to outrage from wary Investors moving out of the investment market after less than ideal experiences. The fact is there is truth on both sides.
For new tenants, without a rental history, high levels of competition, often with 70-150 applications per property, make it difficult to have their application short listed when Landlords can choose from so many. It can be really tough establishing a rental history and it is imperative now more than ever before that you protect that rental history just like you would your credit history. Housing affordability is also at crisis, where households who spend more than 30% of their income on housing are considered to be in housing stress. We see applications well above that threshold which would place these families in a situation where food and utilities become too difficult to afford.
During the pandemic high density housing became less attractive and renters left major cities preferring the space and lifestyle of regional areas. This drove rent prices up and caused stock shortages. New properties becoming available for December 2021 showed that regional areas were almost 20% down from previous years. There are other factors influencing the shortages, such as more people holidaying at home so in regional areas some owners have transitioned their properties to short term rentals to capitalise on the available returns. At the other end of the spectrum are disillusioned Investors moving out of residential investment.
It’s not just the lower end of the market, even Adelaide’s eastern suburbs such as Burnside and Myrtle Bank are now considered unaffordable.
National vacancy rates are at the lowest in sixteen years and SA currently has the lowest vacancy rate on the mainland. Given that around 25% of South Australians rent privately, and the state has halved its pre-pandemic vacancy rate, the situation does not look like it will improve any time soon. In January 2022 there were only 819 vacant properties in SA, compared with 1405 in 2021, and 2793 in 2018. This shortage will place vulnerable families in housing stress and while the simple solution seems to be more public housing, is this really an option? It certainly does not appear to be high on the agenda for the election and yet, isn’t housing one of the most basic needs in this country? I don’t have all the answers, but some things are certain – the housing crisis is real, more education is needed for tenants to help maintain a positive rental history, more training is needed for the Property Management industry in terms of mitigating not exasperating the situation and now, more than ever before, expert Property Management is vital to the success of your investment.
If you have an investment property and are seeking better management please call our office on 8285 9125 – we’ll match you with the best Property Manager for You and Your property.
