Rental Market Update

Changes to legislation

Prompted by a few landlords asking questions about how the recent changes to legislation have impacted the rental scene, we thought we’d share some thoughts and put your mind at ease. Media hype at the time made a few investors nervous however, the wash-out has been minimal. With a few tweaks to our procedures, the changes to the number of days required to give notice, by both landlord and tenant, is perfectly manageable. Additionally, the change to bond amount has been somewhat counterbalanced by the increase in rental rates and thus far, if anything, has kept the rental scene buoyant, as renters have a little more in their pockets to afford the surging rents. Having analysed the Residential Tenancies Act in its new form, we’ve realised that most of the changes were already being practised by our agency, as part of our ethical standards and our clients needn’t worry about any great impact to come. At the end of the day, with a clear understanding of the act and the right procedures in place, we’re set up to accommodate the small amendments and work them to our advantage. Afterall, that’s what we’re here for!

Quick wrap-up for 2023

The vacancy rate in Adelaide remains historically low at around 0.04%, with Mayo’s vacancy rate even lower, at 0.02%. With the current lack of supply and such huge demand, renters are still struggling to find accommodation and, as people search further afield for solutions, this strength in market has spread to regional areas. The desperate need for housing has also influenced the short-term market, encouraging many owners to switch to long-term agreements, to enjoy the benefits of higher rent returns and tenancy stability.

Over the past couple of years, rents have significantly increased, and we have witnessed one of the most extreme booms that SA has experienced in decades. After numerous rent increases, we are still achieving very strong rental rates and our landlords are now enjoying excellent returns. For owners who have weathered the years of sluggish yields, the outcome is extremely desirable. Capital value has exploded, and rent rates have followed, placing long-term investment holders at their prime.

Importantly, these market conditions should remind us why we invest in property. With restored faith and a greater foothold, now is the time to hold on to our investments, ready for another cycle, and feel confident that our money is performing well. A quick cash-out in a buoyant market can always be tempting, however, hindsight in 5-10 years will nearly always convince you otherwise. Importantly, as a landlord in such a tight market, you should feel proud that you are you contributing to the greater good of the rental crisis, by providing housing and keeping the rental system afloat.

If you have any thoughts you’d like to discuss, with regards to renting, buying or selling, we’re always keen for a chat!

Yours,
The Team at Mayo’s