Big crowds hit open inspections as rental demand rises to highest level in decades

Real estate agents say hundreds of would-be tenants are checking out every property they offer as rental demand skyrockets.

Demand for rental properties across Adelaide is the highest in more than a decade, with hundreds of inquiries per home, big crowds at open inspections and scores of people lodging written applications.

Industry experts say the demand is driven by fewer people leaving South Australia due to the COVID-19 pandemic and more choosing to call the state home.

Turner Real Estate chief executive Emma Slape said the industry was working its way through a 10-year peak in demand, which was in turn driving prices up.

The Real Estate Institute of South Australia said demand had not been higher since the GFC in 2007/08.

Ms Slape said prospective tenants would have to look at many properties before finding a home.

“It’s tough – we are getting people every day really stressed about it and not able to secure a new place before they move out of the old one,’’ Ms Slape said.

Turner Real Estate’s vacancy rate for 3000 managed properties had dropped from about 3-4 per cent to 1 per cent, she said.

Emma Slape, general manager of Turner Real Estate

“Last month we leased 81 properties, but we had 9212 inquiries, conducted 273 inspections with 1748 groups attending and we received 1084 applications on those 81 properties,” she said.

“That is insane and our vacancy is currently less than 1 per cent.

“By contrast, in June 2020, we leased 71 properties but had 3958 inquiries, 308 inspections with 703 groups attending and 547 applications on those properties.”

COVID-19 restrictions were in place for rent increases, but Ms Slape said higher prices for new properties coming on to the rental market and new agreements with new tenants were increasing rent prices overall.

The latest figures released by the Office of Business and Consumer Affairs show rent increases of greater than 5 per cent in the councils areas of Burnside (10.39 per cent), Holdfast Bay (10.19 per cent), Mitcham (6.15 per cent), Onkaparinga (6.06 per cent), Tea Tree Gully (5.63 per cent), Charles Sturt (5.41 per cent) and Unley (5.33 per cent).

Rental house hunters could expect to pay $20-$30 per week more on a family home if they were new tenants to the property, or $10-20 per week for renewal, she said. For units this would be $10-$20 for a new tenancy, and $5-10 for a renewal.

REISA chief executive Barry Money said there was a desire to stay in or return to SA because of the state’s strong record handling COVID-19 and its economic outlook, while this also had contributed to a reversal of the state’s brain drain.

“Adelaide is a centre of innovation and that is attracting workers and organisations to the state,” he said.

“It is increasing the need for rental and sales properties, and decreasing the time they are on the market.”

He said one of the city’s key property managers “said he had never seen as many applications for rental properties since before the GFC.”

Mr Money said the rental market would be brought back into balance by increased supply: “Supply follows demand and I think there will be a number of property owners putting their properties on the market.”

Head of property management at Harris Real Estate, Dan Hill, confirmed between 20-30 prospective tenants were applying for each property. Ms Slape said the rush had begun in October last year, as the full consequences of the COVID-19 pandemic became evident.

The general manager of Raine & Horne, James Trimble, said the sharp increase in the rental market was reflected in sales, with one Linden Park property over the weekend attracting a massive 74 purchase offers and 200 inspections.

“This level of interest is very unusual for Adelaide,” he said.

Originally published as Big crowds hit open inspections as rental demand rises to highest level in decades