Property Management: Demand under the spotlight
Anecdotally, we know when the busiest period for rental demand takes place in Brisbane. Our Property Management Team are run off their feet with inquiries during the 2 peak periods of the year. As advisors, we specifically structure leases to fall due for renewal during the peak period of demand to maximise the opportunity to secure the highest rent for properties.
To check in on the greater Brisbane market, we decided to take a look demand by analysing bonds lodged with the Residential Tenancy Authority (RTA). This body holds all rental bonds for properties in Queensland.
Looking at the primary residential property types (units, townhouses and freehold houses), the traditional peak periods for rental bond lodgements are still February / March and July. Interestingly, September is building as another peak in activity.
Taking lag* into account, the Monthly Trend graph below shows that the majority of tenant activity is taking place in late January / February. In 2017, we witnessed a slight change, with the higher level of activity moving further into March, and a spike in August, particularly in unit and house activity.
Whilst we continue to analyse changes in tenant activity, these results do not change our recommendation to have your rental property lease come due for renewal in late January / February or around July.
Looking at the changes in demand by tenants for different property types, the graph below shows the number of bonds lodged for units has increased year on year for the past 3 years. Year to Date to August 17 was up 17% on the same period in 2016 and up 20% on the same period in 2015. We believe that this is the result of a greater number of new units being available for rent and drawing demand away other property types.
Turning to townhouses, demand has risen moderately but steadily over the 3 years analysed with 7% more bonds lodged in the YTD period from 2015 to 2016 and 2016 to 2017.
Houses have had less consistent results. Demand in 2016 was 5% lower than 2015 but rose 3% YTD 2017.
Interestingly, weekly rentals for each property type have not altered in line with the demand trends. Rents for units have experienced downward pressure, vacancy for townhouses has increased and rent returns for houses have been less effected.
In the next newsletter, we will look at changes in weekly rentals and the factors that have the greatest effect on rental income in the current rental market.
*Bonds are generally lodged with the RTA around 4 weeks after property has been leased. The lag is a combination of properties being advertised approx 2 weeks before they are vacant and the processing time from receipt of bond to RTA receipting it.