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:
- Andrews Farm, SA
- Richmond, VIC
- Fitzroy North, VIC
- Epping, VIC
- Collingwood, VIC
- Preston, VIC
- Fitzroy, VIC
- Abbotsford, VIC
- Moonah, TAS
- 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.
How to keep your fees low
At :Different, we charge a transparent, flat fee of $30 per week plus GST. Additionally, we also charge:
- A leasing fee: 1 week's rent plus GST
- A marketing fee: $350 plus GST, and an additional $150 plus GST if you need professional photos
Want to know how much you could be saving? Just use our savings calculator to find out how much more you could have in your pocket each year.
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