2020 has been a challenging year for many of us.
But for property owners and investors, it hasn’t all been bad news. Here are four things landlords and investors in Lake Macquarie and Newcastle need to know about the rental market this year.
1. More people are renting than ever before
Now is generally a good time to be a property investor and residential landlord, despite the pandemic.
According to a recent Survey of Income and Housing data, between 1997-8 and 2017–18, there was an Australia-wide decline in the proportion of households owning their home without a mortgage, and an increase in the proportion of households with private rental agreements.
The data also shows people aged under 35 are more likely to be leasing a home and that the number of private renters has been steadily increasing over time.
According to Census data from 2016, 22.9% of properties in Lake Macquarie are rented compared to a state and national average of around 31%. That tends to mean the rental market here is always tight. But, it could become tighter still.
After all, Lake Macquarie’s population is forecast to grow by 25% by 2050 – or from 200,000 to 250,000. In line with this, the Lake Macquarie Housing Strategy forecasts we’ll need an extra 13,700 dwellings by 2036. It also suggests that to increase the diversity of housing stock in our area, this should consist of a mix of units, houses and semi-detached dwellings.
2. Vacancy rates in our area are low
While media headlines have been full of capital city rents falling, this simply hasn’t been happening in our area. Continued strong interest in Lake Macquarie and Newcastle rental properties means we also have close to a zero percent vacancy rate across our residential leasing portfolio.
For example, according to realestateinvestar.com.au, rents in Warners Bay are now $460 a week for a house and $465 a week for units – up 2% 19% compared to this time last year. The vacancy rate in Warners Bay is only 0.83%.
In Toronto, houses rent out at $380 and units at $330, with a vacancy rate of 0.43%. Meanwhile, Valentine has a median weekly rent of $523 for houses or $430 for units with an impressively low vacancy rate of 0.36%.
3. There are new residential tenancy law in NSW
Just as the pandemic hit in March 2020, the NSW State Government brought in some long-awaited changes to the Residential Tenancy Laws. It’s important that landlords comply with the new laws to avoid fines and penalties.
Key changes include:
- Rental properties must meet seven minimum standards to be ‘fit for habitation’
- Landlords are restricted in the frequency of how often they can increase rent
- There are new obligations around smoke alarms and water efficiency
- Tenants have greater freedom to make certain changes to the property
The new laws also bring in several other changes, including to trust accounting and inspections. You can see the full list of these at FairTrading.com.au.
In the meantime, if you have any questions about how this may affect your property or tenancy our property management team are across the detail.
4. COVID-19 has changed renting in 2020
COVID-19 has meant that we have all had to adapt and change the way we do business. While life has returned to something resembling normal in Newcastle and Lake Macquarie, we still receive requests for private inspections instead of open homes and video calls rather than face-to-face meetings.
Fortunately, technology allows us to administer our rental properties in a COVID-safe way, protecting our property management staff, tenants and landlords.
In March, the Commonwealth and NSW governments agreed to several emergency measures to assist landlords and tenants through pandemic, including instituting a six-month moratorium on evictions where renters are suffering financial hardship due to COVID-19. You can read more about this on the Fair Trading website.
Despite the government’s measures, we’ve seen few tenants claim for financial hardship. As the figures above show, rental properties in our area remain in high demand, so that Lake Macquarie and Newcastle remain a sound investment.
Want to know more about the state of the local rental market?
Find your ideal investment or home in Lake Macquarie or Newcastle by contacting our team today.