Local Rental Market Update
As Orange continues to grow as a thriving regional centre with people moving here on the back of that growth, investors are continuing to recognise the value of investing in property here.
We are finding that with the vacancy rate being very low and current market rent prices offering good return on investment together with continued low interest rates, the demand for property in Orange by investors continues to be high heading into the winter months.
Unfortunately for those looking to rent it makes things tougher with increased competition for properties and having to pay higher rents as the market rises.
In an interesting twist that we haven’t really seen before, our Senior Property Manager, Peter Gott believes that the growing popularity of Air BNB and the like as an alternative short term stay option is also having an influence on the supply of properties to long term tenants.
Peter says:
“We are still seeing a strong contingency of investors hitting our Orange market and this should drive up vacancy. However, with 279 Air BnB properties available as of 25 May 2018, instead of adding investment properties to the market for local residents, it is in fact having an opposite effect with an increasing number of investors going down the short stay track, preferring to have flexibility with their investments and possibly higher rent.”
With the overall average vacancy rate in Orange sitting between 2.7% and 1.7%, and our own vacancy rate currently at under 1%, the market only seems to be getting tighter which will place continued upward pressure on available properties and higher rents.
The impact of short stay accommodation on the local market is one that we will continue to monitor with interest, particularly following the issues being experienced in the major cities which will likely become more widely known as housing experts begin to research and investigate the full impact of Air BNB on the housing market.
Perhaps the trend towards short stay accommodation will be a short lived one as landlords begin to weigh up the rental return against the time, energy and effort involved in managing short term stays and find it not as lucrative as they imagined or perhaps it’s here for the long haul with long term effects on the rental market. Only time will tell.
Either way, we anticipate that the rental market in Orange will remain strong and we will continue to work hard for our landlords as we help them make the most of their hard earned investments.
