The way Adelaide rentals have been going up in price, some people are starting to lose hope and are looking in every conceivable direction for someone to blame. Let’s take a look at the Adelaide property market as well as the rental market in Adelaide over the last few years and see if we can shed some light on why rental prices have been skyrocketing–there may be some light at the end of the tunnel and some strategies to help you find your way there.
Supply and Demand
Did Adelaide’s population explode so much in the last two years that it caused rent to go up by as much as 20% to 40%? No, not really, but population isn’t the only factor in demand when it comes to real estate.
Demand for rentals actually hasn’t increased very much at all; rather, it’s a perfect storm of landlord sales, work-from-home jobs, and demand for owner-occupied purchases. In the last two years, many people have reevaluated their lives and have decided that because they can now work from home, there’s little reason to live close to the city for a shorter commute.
Ergo, they have flocked to the suburbs and what were previously known as the worst suburbs in Adelaide are experiencing a resurgence.
Further exacerbating the crisis is rising property prices which have enticed a significant portion of landlords, especially older ones, to simply cash out and retire. The purchasers of these properties are not looking to rent them out—they intend to occupy the property themselves, thus reducing the supply of available rental properties.
But that doesn’t mean you can’t find cheap rentals in Adelaide. By setting up your match profile on Soho.com.au, you can get sent new rentals as they come onto market!
What Are the Bright Spots?
Due to the flight to the suburbs and the vacancy of many office buildings because of work from home policies, we are now seeing rental prices stabilising and dropping in areas previously thought to be immune to real estate price decreases. If the bustling city life is what makes you happy, there’s never been a better time to try and snag a spot closer to downtown.
Of course, the government has taken notice of the rental crisis. Several bills are currently being discussed that are attempting to limit landlord price increases and cap rents for certain vulnerable groups of people, including the price of renting retirement units in Adelaide.
Eventually, supply and demand will reach a point of equilibrium and prices will stabilise. The market has been so hot that price decreases are not out of the realm of possibility if the housing market begins to show some cracks.
It’s at this point that you can probably begin negotiating rent in Adelaide; it’s also entirely possible that we’ll begin to see commercial real estate being converted to apartments and other more affordable housing options. The work-from-home trend has left many commercial property owners reeling and looking for ways to make their properties desirable again.
Also, while the rent is getting pricier, you can still find cheap units for rent in Adelaide if you look for them.
In Summary
One last factor in the sale of rental properties to owner-occupiers has ironically been governmental property laws related to taxes and home rentals. Some of these new regulations have made it untenable for landlords to maintain their property as a rental because meeting the new codes and taxes make renting the property unprofitable.
This is not to say it’s entirely the government’s fault, and one must admit there are no magic wands that can be waved to fix the problem. Over time, the problem will resolve itself one way or another; the market always self-corrects, often when you least expect it.
