Rental properties in high demand

Rental properties in high demand

The Limestone Coast rental crisis continues, with rising interest rates, increasing costs and high demand presenting tough times with no end in sight.

According to the PopTrack rental report June 2022, rents in regional South Australia have risen by 17% year-on-year, with the median weekly rent in June recorded as $310.

The report said this followed a 14% decline in total rental listings year-on-year and the median weekly asking rent in Mount Gambier at the time of the report was $245.

Millicent Real Estate manager and sales consultant Melissa Patzel said the rental situation was “dire” and showed no signs of improvement.

“Interest rates are rising, costs are rising, so rents are unfortunately going to rise and there’s a high demand and a virtually non-existent vacancy rate, basically, at the moment,” she said.

“We have a zero vacancy rate, we manage about 340 properties and as soon as they become vacant they’re leased, we have already found a tenant for them.

“We do not need to advertise anymore, there’s nothing for rent.

“We have people that apply for rentals, they’re kept on file and once something comes up, if they have been suitably approved, we offer them the property.”

Ms Patzel said the rent for an average house in Millicent was approximately $250 to $280 per week.

Ms Patzel said house prices had risen across the whole South East and investors were taking advantage of increased values in the area.

“The real estate market is booming, that’s not doom and gloom, but unfortunately the downside of that is people that have had investment properties are taking advantage of the higher sale prices and cashing in, as you would,” she said.

“Once the interest rates go up investors always look for a good return, so when the interest rates go up, obviously rental prices have to go up to give them the return to invest into the rental market.

“It would be a terrible situation to be looking for a rental.”

Ms Patzel believed people from metropolitan areas were taking advantage of higher house sale prices in the city, selling up and buying a property outright in the region for significantly less.

“Even during COVID people wanted this lifestyle,” she said.

“Millicent has had a huge influx of new residents.

“We had people from Victoria, New South Wales and Queensland buying properties sight unseen.

“They had a video tour and just wanted out because they were in lockdown, particularly in Victoria.

“I showed a property to a gentleman the other day from Victoria and he believes there will probably be another influx of people from Victoria because he said they’re a little bit worried they’re going to go back into mask mandates.”

Ms Patzel said she could not see the rental situation improving in the short-term and said more housing was needed.

“It’s a sad situation, that’s all I can say,” she said.

“We need affordable housing in South Australia and all I can think is the government needs to look at that.”

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