Bathurst Real Estate principal Michael Whittaker has confirmed just how tight the rental market is in some regional areas of New South Wales, noting vacancy in his region is currently below 1 per cent.
In August, the Real Estate Institute of NSW released figures indicating, while Sydney had experienced its fifth month of vacancy increases, regional areas were showing a general vacancy decline.
“This month’s results show that COVID-19 is having a significant impact across the whole of New South Wales and it’s unlikely that things will settle for a while yet,” REINSW CEO Tim McKibbin said at the time.
The central west is among the areas navigating this tightened market, with Mr Whittaker explaining the vacancy rate could be as low as 0.5 per cent in Bathurst, while Orange was also experiencing similar conditions.
“In a normal year our vacancy is 3 to 4 per cent. That’s probably the sweet spot, and it’s hovered there for many years,” Mr Whittaker said
But now COVID has seen the situation “nearing crisis point” where every property listed attracts a large volume of increasingly anxious applicants.
“We recently listed a four-bedroom, two bathroom property in a good area for $450 per week and had 64 prospective tenants register,” Mr Whittaker said.
“The landlord then re-listed the property for $500, and still had 20 applications.
“Then on Monday, a property attracted 34 registrations for inspections within just 30 minutes.”
Mr Whittaker noted demand for rental properties in the NSW central west was being driven by a range of factors including people moving to the area from both Sydney and Melbourne.
“People are moving to regional NSW and working from home. Where they might have been paying $700 or $800 per week for a property in Western Sydney they can move to Bathurst and have a bigger, better home for much less.”
However, he also explained there were greater factors at play including recent changes to the Residential Tenancies Act, and more stringent conditions around investment loans.
“It was predicted a shortage of rental properties would take place because investment loans are harder to get,” he said.
“And that may mean we see investment drop out of the market.
“The RTA has also just introduced over 100 changes and the minute you do that, if landlords feel weighted against, they will put their money somewhere else.”
Meanwhile, managing the surge in rental interest is not without its challenges.
Mr Whittaker said people looking for a property to rent were becoming increasingly anxious and the logistics of the COVID-19 landscape made managing inspections more difficult.
“During COVID you can’t get 64 people into a property in one go, you have to bring them through in groups,” he said.
“We are dealing with tenants who are anxious about not getting into a house and some are demanding to be first cab off the rank when it comes to getting into a property.”
His team has implemented a range of measures to cope with the influx of inquiry including contactless rentals facilitated by 3D tours, floorplans and DocuSign, while he notes good communication and empathy are key.
“There have been a lot of complaints from people missing properties, but it’s a no-win situation and once we give people an explanation they understand. The reality is we can only lease a house to one person.
“Our aim is to keep the lines of communication open, and encourage our staff not to take it personally as potentially the person on the phone is dealing with the fact they may have nowhere to live.”
The spike in demand is also impacting rental prices, which Mr Whittaker notes have increased around 10 per cent in recent months.
“A unit that was previously getting $275 per week would easily get $300 now,” he said.
“And it could rise further from there.
“The bottom line is right at the moment Bathurst is experiencing a severe shortage of properties available for rent and it’s similar in Orange.”