Raine & Horne Slacks Creek / Shailer Park Blog

Slow market? Or a saturated market?

By Emma Mckirdy 0409 494 874

As we face the turning point towards the end of the year, landlords have been asking a top question to their property managers. “Why is it taking longer to rent their property?”

 The real estate property investment market has experienced a slow market in the past year, however it is not the case for some properties.

In the Brisbane area, it is a known fact that the market is being over saturated with units and townhouses. You only need drive down neighbouring streets of popular suburbs to see the abundance of developments that are being built, regardless of the size of the block.

So, what does this mean for the property investor? Older built properties have been forced to reduce their price per week while newer properties seem not reaching the optimum price that landlords were hoping to achieve.

While beautiful properties are being built unfortunately the competition is too much for some units. While there is no doubt that the properties are of a high quality, there is just an over stock of the market, this creates a situation where tenants can take longer to choose a rental property and while a property sits vacant, owners and property managers are forced to reduce prices to rent their property quicker. A lot of agents succumb to “price wars” as the next agent continues to drop prices, a domino effect is inevitable.

So, what can existing landlords do? The short response is to ride it out, there will always be a certain percentage of properties that will take longer to rent, lower your expectation of the rent you will receive while there is too much competition. Also look at what can set your property apart from other properties, a new coat of paint, new carpets or fixtures can sometimes go a long way. Find an agent that will highlight your property in its best light. Look at having your property photographed professionally to make it stand out from the crowd.

Using an agent that will work with you, not against you. You need a property manager that is prepared to conduct open homes as their top priority to ensure they have prospective tenants viewing your property at convenient times for all prospective tenants

If you are new to the property scene and you are looking to invest for the first time it might be beneficial to you to look at house purchases over units and townhouses, the rental house market is still relatively demanded especially for a pet friendly property, with a fully fenced yard. So, if you are looking to invest for the first time this may be a more viable option.

One thing is for sure the market will always change, the sales market has been relatively strong while interest rates continue to fall, which means that the selection of tenants have decreased as they become first home buyers. The swing in the market will eventually come as the sales market quietens the rental market will be sure to gain momentum again.