Why the Tenant Pool Is Now a Lake
The rental market is still very tight with only 234 properties available in Toowoomba (realestate.com.au as at 04/01/2022).
Just to give context, generally this figure is more than 1000 at this time of year!
So what is causing this irregular market?
Well it could be a myriad of reasons, but here are our educated guesses as to why this occurring-
Tenant pool is a now a lake – What do we mean by this? A tenant pool is the tenants actively looking for a rental property. Many agents already have a pond of tenants (not too big) that they already know are looking – often called a tenant database. These would be good tenants that owners have had to ask to leave if they are selling or moving into the property. As the agent, we always try to find them something that’s coming up and these tenants may take priority over others. But as you read on you will see that it’s growing.
Sales market – lots of investors are taking advantage of the high sales return at present so are choosing to flip a property instead of investing and renovating. This is causing tenants to have to find another property, which adds more prospective tenants to the pond/pool.
Owners moving back – Some people (poor souls) left for greener pastures in other states. But after lockdown, they have realised that the grass isn’t greener. When borders have opened they are on the yellow brick road home to QLD pushing tenants out of their rentals and into the prospective tenant pool.
No one is leaving – generally at this time of year we have a number of owners moving for work, school or travel. This creates accidental investors (people who rent out their home for 12 months while they are away). This hasn’t happened this year so we don’t have those short term opportunities. I mean why would you leave Qld???
Divorces and separations – There have been an increase in separations and divorces in the past 18 months (lets say lockdown wasn’t good for some people). Federal Circuit Court statistics reveal an 8% rise – so why does this impact the rental market? Two people living in 1 home suddenly becomes 2 homes and the secondary person (leaving) often chooses to rent, meaning another tenant to the now prospective dam not pool.
Toowoomba is awesome – Yes, this is a reason. As a local business we have grown and employed staff during covid as have many many other business in this lovely city. Toowoomba has remained economically sound during the last 18 months and many business have grown which means more jobs, more people coming to this area for work and more rentals needed – the pool is now a lake.
Is there an end in sight? Any agent that tell you yes or no must have a crystal ball. The truth is that we just don’t know.
For tenants – batten down the hatches and lock in those long term rentals where you can and follow our tips for improving your rental application.
For investors, ride the wave but don’t over capitalise as interest rates can rise just as much as rents can.