Tradition before the latest trend
Vacancy rates are usually at their peak during winter and for many markets this is the situation. However, this year, winter vacancies within our portfolios are at the lowest we have seen for many seasons.
The reason is a combination of demographic factors but underpinning this increased tenant demand is our strict property selection.
High immigration and natural population growth are keeping the rental market strong but a lack of suitable properties available for purchase is also having a big impact.
Would-be home buyers are being forced to remain in the rental market because they can’t find what they want to buy. And many are willing to pay a bit more for a nicer property to rent.
By nicer, I mean a traditional property in a good location — and not a high rise apartment.
Unfortunately the great bulk of new homes under construction are non-traditional housing stock, mainly high rise, multi-unit buildings.
These developments, however, do not tick the box of most buyers (or good quality tenants) — and I strongly agree with them.
As sales indicate, many unit buyers do not intend to live in these properties, they are purchasing them as an investment. And by sheer force of the housing shortfall, they are finding tenants — although many towers still have very high vacancy rates.
However, a good investment needs to be in demand by both owner occupiers and tenants.
Traditional small houses, townhouses and boutique or period-style apartments are always in demand. That is why our vacancy rates are at such low levels.
Not only do tenants want to rent these properties but, when the time comes, both owner occupiers and future investors are also in the queue to purchase them.