What Housing Crisis?
Met with a friend for lunch yesterday and we were discussing the housing market, in particular the rental market. After I explained the current market conditions, he said so why do they keep saying we have a housing crisis?
I replied that’s a great question?
What has changed the market conditions. Since 2021 when we were renting properties the majority of people who came to our viewings, were indicating the reason the were moving was due to the property they live in has been sold or is being sold. What this means is they “need” to move. In late 2022 and early 2023 we started to hear more people communicate to us that they were “just looking”? The unit they were in was not up for sale and therefore they were not in a need to move. This one simple issue changes the market conditions quickly.
When potential renters are not in need of moving they have the option to say no to the property and take their time to look for the best value. The majority of people who are attending our viewing today are “looking” to move to a better property then they are in now. Better means different things to each person. Many people who are looking for a larger place than they currently reside at may be the same size and or close to their current rent. They may be looking to improve on the quality of the property they live in at the moment. Moving to a newer building that has better amenities than where they are now. Many employers are pushing for more time in the office and some people are looking to move closer to their work. With the adjustment in prices this allows them to move closer and the same and or similar prices.
What does this mean to the current rental market?. Currently there is an over supply of product meaning there are more units for rent then there are people looking. More supply than demand. This is causing the rental prices to decrease on a monthly basis.
For landlords this means you neeed to be more diligent when selecting your tenants. Landlords don’t like their property to be vacant and in situations like this will often rush into the first person who applies for their property. We have met potential tenants on a Saturday who advised us on Sunday they looked at another place after seeing ours and have signed with the other location. We find it hard for the landlord to do the proper due diligence on the tenant in a short period of time and on the weekend and in the future this may turn into a negative tenancy due to rushing the tenant selection process. After a tenant moves into your property it can be difficult to have that person removed from your property.
Landlords need to ensure their property is clean, items are repaired and in working condition. Sometimes a slow down in the market is a good time to take the unit off the market and renovate the unit, or upgrade the appliances to make it more attractive to potential renters.
Eventually the market will shift again and there will be less product and more demand creating a more stable market. Patient is a virtue, especially as a landlord.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
