There are several factors to consider when looking at property investment, and one of these is vacancy rates. In general terms, the vacancy rate is the percentage of available rental properties that are vacant or unoccupied at a particular time.
High vacancy rates indicate property is not renting well while low vacancy rates can point to a strong rental market.
Types of vacancy rates
While vacancy rates in the media generally refer to whole cities, there are different types of vacancy rates. For instance, you can find vacancy rates for an individual property, properties in an apartment block or for a suburb.
When looking at vacancy rates for an area, they can be further broken down to types of property such as units and houses. Vacancy rates between these may differ – there may be a high demand for units, but not so for houses.
Vacancy rates can also differ between property management agencies. Some management companies have higher vacancy rates in the property they manage than others.
Our vacancy rates have always been around 1% under the average vacancy rate thanks to our active team and intense, expert marketing. For instance, quality photos, well-written descriptions and marketing on over 15 websites makes sure our properties get seen by potential tenants.
And it’s not just making sure a property is seen; we make it easy for potential tenants to apply. Yes, we do have paper application forms but we also use 1forms, a web based application process where people can apply straight from their computer or smart phone.
Newcastle vacancy rates
From around 2002 until 2011, rental properties were in high demand in Newcastle and we saw some low residential vacancy rates of around 0.7 to 1.5%.
For investors, this was great news, as there was a sharp increase in rental prices.
Since 2012 however, we have seen rental vacancy’s increase with a peak vacancy rate of 4.6% in April 2015.
During this time, residential rental prices fell for a while, but they have recovered and now show a modest increase in what they were six years ago.
Vacancy rates are down
For the first time since this time, the Newcastle vacancy rate came in at under 1.5% in January 2018 – latest data shows it sitting at 1.3%. This is brilliant news for investors as it’s suggesting there is a demand for rental properties.
If this trend continues, we can expect to see rental prices increase substantially with more people attending open for inspection along with more applications for the properties.
Want to find out more about vacancy rates or how we keep the properties we manage tenanted?
Come on in for a chat or give us a call on 02 4954 8833!
We are one of Newcastle’s longest established property management companies, and in the over the 40 years we’ve been successfully operating in the area, we’ve helped thousands of people realise their financial dreams through real estate.
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