Contrary to the figures released by PropTrack in January, the rental market condition in Hobart has now started to slow down, leaving renters in a ‘now or never’ situation.
According to PropTrack, renters need to sacrifice in order to afford Hobart’s high rents. In fact, at a median rent of $540 per week, Hobart residents pay the fourth-highest rent in the country. Battery Point and Sandy Bay were among the most expensive rental suburbs with $695 and $658 rent every week accordingly.
Lo and behold, the month of February came as a massive surprise for everybody.
What is supposed to be an active rental market has suddenly slowed down due to increased rental stock and rising living costs. The bottom line, rental prices are dropping. And tenants now have more options to pick from since there are more rental homes available on the market at a lower price point.
Because of increased rental competition, property owners are having a harder time finding tenants for their properties. As a result, rent prices have been under pressure and some landlords have lowered their rent in an effort to draw in tenants.
Additionally, living expenses in Hobart including electricity bills and commodity prices are continuously rising and it has become increasingly challenging for people to move to the city. One major reason is that the amount of spare money people have to spend on housing has decreased.
Business Development Manager of 4one4 Property Co. Joanne Strange has also pointed out affordability as one of the major factors contributing to the market’s slowdown. “It really forces people out because they can’t afford that higher price. Not to mention, the cost of living has also gone up crazy,” Joanne highlighted.
“There has been a really big shift because of this. Before, we used to do one or two open homes and we’ve had enough applications. But now, we have to show the properties multiple times,” she shared.
In a report presented by realestate.com.au, rental vacancy rates have increased over the year in both Hobart and Regional Tasmania. From 0.8% last year, it rose to 12% in Hobart as of this writing. Additionally, enquiries per listing in Hobart went down by -54.8% and potential renters per listing have also decreased by -34.9%.
With more competition in the market and lower rental rates, Joanne thinks it’s the best time for renters to take a stroll around the property ladder and assess the neighbourhoods’ price points.
“If you are renting a property that is quite high, then perhaps now could be a good time to look around because you might actually save money. Now you have that initial moving cost, but there might just be a bit of a cheaper property around.”
As they often say, what goes up must go down and vice versa. The dilemma of this situation being turned upside down is anywhere to be seen, especially since experts forecast a rise in rental demands in the following months of 2023 and over the next few years.
One major factor contributing to this is international borders opening up further. The tendency, rent prices will increase and so we may also expect a rebound among property investors.
Although Joanne sees this slowdown taking over the market for quite a while, she still thinks that when a lot of people, especially students from overseas, move to Hobart, we’ll see the market open back up a bit more.
How does 4one4 stand in this tough market?
Regardless of the current rental market situation, 4one4 Property Co. has been achieving exceptional results for its clients. At an average rent of $494 per week, a rental property managed by the team lasts for about 19.9 days in the market.
Enquiries-wise, the agency has received 1,049 rental enquiries with 38 inspections conducted. Applications for rental were recorded at 180 with 12.85 per property.
Just recently, 4one4 Property Co. has bagged some awards in the RateMyAgent Agent of the Year Awards 2023. It was placed in the top 5 real estate agencies in Hobart, top 10 in Tasmania, and top 100 in the country.
These figures and recognitions are a testament to 4one4’s dedication to quality service. Even in a tough market, 4one4 Property Co. is still true to its commitment to providing ‘all types of properties for all types of people’.
Joanne has revealed that being consistent and proactive in such a market situation helps 4one4 Property Co. cope and adapt. “We’re just moving forward and continuing to do something we’ve always done, but being more mindful with things ahead of time.”
“If we know that tenants or owners are moving out of their property, we would advertise earlier with enough time to find a suitable application. That’s something we’ve been putting into place to achieve a smooth transition, with less downtime for our landlords as well.”
For property investors out there, Joanne has also left some advice that might help you in this indecisive market.
“I think being open to advertising the property in advance is essential as well as the pricing. You need to have a price just right to get enough interest. If you want to aim for a higher price, you’ll probably have less or worse, no enquiries.”
If you have any queries or worries on the rental side of things, our Property Management team is willing to help you. Feel free to contact us at your convenience.
