The changing state of Melbourne’s rental market
With the New Year comes a time of reflection for rental providers (landlords). Should they hold on to their asset? Should they sell it? Should they change agencies?
When you are talking about property values in the hundreds of thousands or even millions of dollars, these can be life-changing decisions to make.
Reports from Domain and REA have confirmed Melbourne is in a rental crisis fuelled by a lack of residential stock coupled with an ever-growing Melbourne population.
With 1172 properties for lease, ranging from studio to five-bedroom apartments, postcode 3000 presents a rare aberration in Melbourne’s inner-city rental market.
According to Kim Davey, director at Donazzan Boutique Property, the opportunity of surplus leases in the CBD compared to tightly held neighbouring suburbs like North Melbourne (117 rental properties on market) or Carlton (232), sees a great chance to ease Melbourne’s rental strain.
“Imagine if we had 50 per cent more people living in the city, or even if we were able to fill those existing vacancies. How incredible would that be for our city’s businesses. We just need to change the narrative a little bit,” he said.
There is a lot of talk about supply and demand, but we have more than 1000 properties sitting on our doorstep, we just need people to re-frame their thinking about the kind of property people want to live in.
As a principal looking after property management and sales, Mr Davey’s conversations continually circle around whether his clients should lease, sell or hold on to their properties.
However, there is a conversation that isn’t being had, he says, that is just as important … one that can have huge implications for a rental provider’s properties value.
“The most overlooked and the most important relationship is the relationship that your property manager has with your investment property,” he said.
“Property managers warehouse a property. They put in the warehouse and look after it, then when the owners want to sell it, the salesperson puts it on the shopfront to sell it. It’s the behind-the-scenes warehouse work that is costing owners the most.”
“Rental providers need to ask themselves these simple questions; How many property managers have you had in 2023? Has the new property manager seen your property? How is this constant turnover impacting the renter? How detrimental is this on your property? What is this costing you in the long term?”
Mr Davey told CBD News, that while not all cases of property management turnover end with issues, he was seeing growing instability within an industry in a constant state of flux.
“Property managers are now protecting and caring for an asset. When you deal with a property manager with a large rent roll of around 180 properties with a valuer, let’s say, on average $650,000 each, they aren’t just looking after your property, they are looking after $120 million worth of assets. That’s an incredible responsibility to have,” he said.
“In this volatile housing landscape, the key is relationship building. I like to work closely with the rental provider. You deal with me, I’ll deal with the VCAT case and the trades people and the renter relationships.”
“We are here if you need someone that has experience and consistency, someone that will be there at the beginning and end of the lease and someone that knows the ins and outs of your property.” •
For more information: donazzanboutiqueproperty.com.au