If there’s one thing renters can delight in this year, it’s the return of a ‘renter’s market’.
A renter’s market comes about through the supply and demand scale of rental housing, which as a direct result of the COVID-19 pandemic, has tipped to favour the renter.
“Supply is the number of rental properties, demand is the number of tenants – currently there are more properties than there are tenants,” the Head of Property Management at Jellis Craig Stonnington, Sam Nokes, tells realestate.com.au. “Therefore the supply and demand ratio is in the tenant’s favour, and we have a renter’s market.”
There are a number of ways renters can take advantage of this type of market – Nokes gives us the details.
1. You have more negotiating power
In a landlord’s market, tenants aren’t likely to have the privilege of being able to negotiate the terms of their lease. A renter’s market means you might be able to get a more flexible deal.
If you’re looking for a rental property, it’s time to celebrate! Picture: Pexels
“It might mean a more favourable price offer will be accepted, or it could mean you get a better start date that bridges some of your crossover costs between properties,” Nokes explains. “It might simply be that you’re able to get a lease term that’s longer or shorter, depending on what you’re looking for.”
However, being in a renter’s market will not improve your chances if you have a poor rental history or application.
2. It’s a great time to live in the city
This change in the rental market is largely due to a few ‘missing’ demographics that would normally be vying for rental properties. A key demographic here is expats.
A home, like this one in Richmond, Victoria, might previously have been snapped up by expats. Picture: realestate.com.au/rent
“The executive-level expat might normally rent larger family homes close to the city,” Nokes explains. “Where that segment is missing, landlords and agents have to look at other segments to fill that gap. So, someone local might be able to move into these homes for less than they would normally cost.”
“Other markets, however, don’t have these missing segments. For instance, an expat isn’t likely to move into a family home in the outer suburbs, so those markets will likely remain the same.”
With that in mind, it’s a great time to live in the inner city where we’re seeing a larger percentage of vacant rental properties.
3. Save on more than just your rental price
A renter’s market can have a positive effect on more than just your rental budget. It can extend to other expenses as well.
For instance, consider your electricity bills or insurance.
“If a tenant can get a similar sized and priced apartment to what they have now, but they can add a garage, they’ll probably reduce their car insurance costs,” Nokes begins.
“Similarly, if you’ve got renter’s contents insurance and you live in a non-secure, walk-up building, moving to a more secure block could also reduce this outgoing.”
Youi Head of Home Product Chris Hope chimes in, adding, “Youi customers generally save on their home insurance premium if the car is parked overnight in a garage”.
An apartment upgrade could save you on insurance and energy bills. Picture: Getty
Nokes adds that moving to a newer property with more energy-efficient appliances could save you bundles on your bills in the long term.
4. Get in quick
With a renter’s market, you’ll want to get in while the going is good.
“In Melbourne, there’s going to be a rush to market come September 13 [when stage four coronavirus restrictions are slated to end]. A lot of people are waiting to do those physical inspections in person,” Nokes reveals.
“If you want to make sure you capitalise on this tenant’s market before it goes back to a landlord’s market later in the year, the best thing to do is be willing to take a property on a digital inspection and get it accepted prior to the end of Melbourne’s lockdown.”
5. Be aware of the downside
“Tenants should be wary that at some point landlords may need to recoup their losses,
Nokes forewarns. “Mortgages are valued at the price they bought the property at and just because the property value goes down, it doesn’t mean the mortgage goes down.”
In other words, prices are likely to go up again. There’s just no saying when.
All in all, it’s never been a better time to get yourself a good deal on a rental property and experiment with where you want to live and the property you want to live in. Listen to real estates and other renters to get a balanced gauge on the market.
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This article was originally published on
19 Oct 2020 at 9:00am
but has been regularly updated to keep the information current.