Darwin landlords urged to move early to keep quality tenants
With vacancy rates plateauing at about 5.5%, landlords are being urged to pay attention to quality tenants to safeguard them against an empty property this wet season.
“The reality is that there is still a surplus of 1,200 rental properties in the Darwin market, the same figure as 6-8 months ago,” said Glenn Grantham, General Manager, Raine & Horne Darwin.
“The market is levelling out with virtually the same amount of new tenants and new rental properties hitting the market every month.”
Raine & Horne Darwin, for example, is averaging 20 new managements a month and 20 new leases.
“We have consistently had about 25 vacant properties at the end of each month for the past six months. Yet we’ve been putting on 20 new managements and leasing around the same number of rental properties. This means we have a lively rental market, but the new activity isn’t eating into the surplus – it’s a zero sum game,” said Mr Grantham.
With the Darwin investment market in a holding pattern, Mr Grantham warns that the duty is on landlords to be sensible about their weekly rental expectations.
“If you are putting the property into the rental market for the first time, you need to be realistic about the asking price. This means listening to your property manager and checking out online what similar properties are leasing for,” said Mr Grantham.
“If you don’t listen to the market, you’ll be an investor without an income.”
For landlords who are facing the end of a lease, Mr Grantham advises them to approach their tenant before they test the market.
“If you have a tenant who is looking after the property and paying the rent on time, approach them immediately with some carrots, such as a discount on their current weekly rent, to ensure they stay put.
“Don’t try and convince them to stay after they have decided to move on. By then it will be too late.”
The strongest rental markets continue to be in the housing markets in the northern suburbs of Darwin such as Milner, Jingili and Moil, where yields of 5.5% are still possible and vacancy rates are below the Darwin average.
“There are 350 two bedroom apartments sitting vacant in Darwin, so this market still has some way to go” said Mr Grantham.