I’m finding tenants have a lot more choice out there in the market, and numbers have dropped at open home viewing from ten to fifteen people at the end of last year; now, on average, three to four groups at an open home.
In my opinion, rents have peaked but not necessarily dropped as yet. I think we will see a correction in the coming months, and the rents will start dropping.
I don’t think the market has entirely caught up as yet, with the rent adjustments because there seems to be more supply than demand now.
Tenants have a lot more choices; they’re not rushing in and applying for the first property that meets most of their needs.
They’re taking their time and looking for a property that suits them best.
If oversupply continues, I believe rents will shift downwards in the coming months, making it more difficult when doing a rental appraisal until we see the shift happen when doing a rental market assessment; it’s better to have a more conservative approach.
This is an interesting article on new builds over supply over the last two years.
As demand slows, the better a rental property fits the masses, the wider the pool of prospective tenants there is and the more likely to rent your property faster.
Generally, there is an order from a higher pool of tenants to a lower pool of demand on types of rental properties.
The highest to lowest demand is as below:
- Three to five-bedroom homes
- Two bedrooms
- One bedroom
What is popular in the current market?
Of course, there will be exceptions to the rule depending on geographic location.
I.e. Wellington or Auckland inner city will be a different market to suburbia Wellington & Auckland and indeed for the Manawatu & the Tararua regions, its families that drive the largest market pool of tenants.
In a slower rental market, you want your rental to appeal to as many tenants as possible, as tenants have much more choice.
✔ The goal is to make your property stand out from other rentals.
If families drive the largest tenant pool, what are the key features that families want in a property?
- A reasonable size backyard for the kids to play in
- A garage, preferably a double
- A decent kitchen and dining room area
- Ideally, two bathrooms or at least a second separate toilet
- Reasonably easy care section.
- Close to schools & bus stops etc.
- Suburb and street location
- A property fully fenced
- Modern décor or recently refurbished
- Presented clean and tidy.
The more key features you tick, your rental property will perform better in high and low-demand rental markets.
Sure you will agree there are some general requirements for most tenants.
The point I want to make here is the more a rental property entices the multitudes, the higher the chance of attracting good tenants faster when a rental market has slowed.
If you want some help renting your property, Call Richard on 027 249 8295 📞