Property Finance

What the shifting rental property market means for you

Published 28th November 2018Updated 3rd April 2023

rental property
Related Posts
A brainstorming session among agency principals about driving sales leads from rent rolls
How To Generate Property Sales Leads From Your Rent Roll
new owner app :Different
:Different UpdatesProduct Update: Introducing Our Brand New Owner App
A man calculating a property maintenance price list
Property MaintenanceHere's How A Fair Property Maintenance Price List Looks Like

Australia’s rental property market is a mixed bag at the moment. While rental property and rental property management prices have been dropping in some cities, in others they have been growing. And for others again, not much has changed.

Sydney, in particular, has experienced quite a slowdown, however, rental listings have increased and rental prices overall have increased, remaining well above other capital cities. Meanwhile, Melbourne houses are taking just as long to rent, but apartments are renting sooner, and both are achieving above-average growth in rental prices.

So, what does this mean for investors? As always, it’s important to be aware of how the market is performing and also be confident that your property is being managed to maximise your return. Let’s take a quick look at current trends.

The market low-down

According to rent.com.au, the Sydney market continues to show signs of a slowdown. Compared to a year ago, the length of time it took to lease an apartment or house in October has increased by 23% for apartments and 22% for houses. That said, it’s interesting to note that there has been no change since last month.

However, the increased time on market also ties in with the fact that there are more listings on Rent.com.au in Sydney than there was last year, with 12.9% more apartments and 3.9% more houses advertised for rent in Sydney than in October 2017.
In Melbourne, the trend is looking positive. The time taken for apartments to rent has dropped by 7% in the last year (houses remain unchanged), and the rental price per room has grown by 8.3% for apartments and 5% for houses, both the second highest growth rate for capital cities.

"What you pay in management fees is important and can significantly impact your return on investment"

The rental hot spots

Not surprisingly, 7 of the nation’s top 10 most in-demand suburbs are in Melbourne. According to realestate.com.au, the rental hot spots are:

  1. Andrews Farm, SA
  2. Richmond, VIC
  3. Fitzroy North, VIC
  4. Epping, VIC
  5. Collingwood, VIC
  6. Preston, VIC
  7. Fitzroy, VIC
  8. Abbotsford, VIC
  9. Moonah, TAS
  10. Burleigh Heads, QLD

Meanwhile, the suburbs with the highest rental prices remain in Sydney, with North Bondi taking out the top spot at $877 average rent per week.

How your rental price can affect your fees

Whether the market is slowing or growing, what you pay in management fees is important and can significantly impact your return on investment.

Let’s look at that North Bondi apartment. Based on rent of $877 per week, an average property management fee at 6.17% would cost $235.17 per month. Add to that all the other common fees and charges you might pay, like letting fees, inspection fees and monthly admin fees and you’re looking at over $6,500 per year in fees. That’s almost 2 months worth of rental income you’ll never see.

Want to stay up-to-date with all things real estate?

Subscribe to our FREE quarterly newsletter for the best property content on the internet!

What is your first name?*
What is your last name?*
What is your email address?*

Disclaimer: The information provided on this blog is for general informational purposes only. All information is provided in good faith; however, we do not account for specific situations, facts or circumstances. As such, we make no representation or warranty of any kind whatsoever, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information presented.

This blog may also contain links to other sites or content belonging to or originating from third parties. We do not investigate or monitor such external links for accuracy, adequacy, validity, reliability, availability or completeness, and therefore, we shall not be liable and/or held responsible for any information contained therein.

CategoriesView all (+4)
Recent Posts
property investing strategies
Property InvestingHow to Invest in Property With Little Money
house
Property InvestingIs It A Good Time To Invest In Property? Here's How You Can Tell
io vs p&i
Property FinanceP&I or IO? - Best Loan Structure for Investment Property Explained

Ready to get more out of your rent roll?

Contact sales
Gain predictable cash flow
Retain full ownership and control
Scale your rent roll efficiently