What the Adelaide Rental Market Says About Rental Property Prices In Adelaide.
While it’s been a downward trend nationally for the property market this year, Adelaide rental properties figures show where things might turn, writes Natalie Salvati from Salvan.
What’s going to happen next to Australia’s troubled housing market?
Will the whole country keep seeing falling property and rental property prices? There’s a difference in the housing markets around Australia, that doesn’t hit the dramatic headlines, that might provide a clue.
If you’re not familiar with Australia’s property price falls in 2019 so far:
- Australia’s capital city average house price is down around 7 per cent
- Perth, down 18 per cent
- Sydney, down 14 per cent
- Melbourne, down 10 per cent
- Adelaide and Brisbane are steady
- Hobart is up, its peak is right now
But there’s another way to look at the housing market. Rentals. And the renting statistics tell a fascinating story.
Rental properties in Adelaide through Salvan have grown on average 3.7%, with Campbelltown exceeding 8%. While property prices from real estate sales remaining static, the demand for Adelaide rental properties has grown. Basically there is not enough rental properties for rent in Adelaide to satisfy the market demand.
In Melbourne, while house prices fall, rental vacancy rates are falling. It’s easy to find a tenant and rents are rising. The demand for housing in Melbourne is strong, so the falling property prices in Melbourne may slow soon.
Sydney however tells a different story. Rental vacancy rates are increasing but house prices are falling and fast. This suggests that in Sydney, people don’t want housing as much any more.
Australia wide, the income Australian landlords, or as we prefer to call them at Salvan, property investors are getting from rental properties is growing but slower compared to the last 5 years. Rental properties in Melbourne are getting more expensive, but cheaper in Sydney.
Understanding the strength of the rental market is important for seeing the future of the housing market.
Adelaide, Sydney, Melbourne and Brisbane are all set to have a large number of apartments released onto the market over the next few years.
Many high rise towers that had their foundations cemented in the boom time will get their carpets laid in what many are calling the bust. Such is the ever cyclic nature of property development. By investing at peak demand, there has become an oversupply that fuels the bust. This has happened all over Australia.
When these new apartment blocks are finally released onto the market, the big question is, Who will live in all those properties? and Will it have negative effects on property prices and rents?
Rental properties for rent in Adelaide are in demand and rents in Adelaide are affordable, so expect a big take up once these large complexes open with property investors renting them out immediately instead of becoming owner occupiers.
In Melbourne, with vacancy rates falling and strong population growth, there is a strong market for those new apartment buildings, both to live in and also for property investors to rent out.
The difference between population growth rates in Australia’s major cities is growing every year.
The lowest amount of growth is in Adelaide, where its at 0.8 per cent per year and the greatest growth is Melbourne, which is growing at 2.5 per cent a year and will soon take over from Sydney as the capital city with the largest population.
In Sydney however, the risk is the flood of new properties will struggle to find anyone to live in them, owner-occupiers or tenants, which will push both real estate prices and rental property prices in Sydney down even further.
For the many Sydney apartments being built in the outer suburbs where apartments have not traditionally been built, this will be even more of a problem.
Turning back to Adelaide rental properties, Salvan has a proven track record with being able to re-lease properties when vacated within a very short time frame, often within a week and on the first opening.
When re-negotiating a rental lease at the end of the term, 99% of tenants are happy to pay the increase in rent to stay. With Salvan, both property investors and tenants win.
As a result, Salvan property managers in Adelaide are always on the look out for new landlords and properties to rent out.
If you’re a frustrated landlord that struggles to find suitable tenants, become a stress free property investor by making the switch to Salvan today!
Adelaide is fast becoming the place property investors in Sydney, Melbourne and Brisbane look to for real growth on their investment.
A good example is the Vue apartments on King William Road, Adelaide. Within just 4 months of it’s release, all 210 apartments were sold out!