Emerging trends as rental market responds to Covid-19

Like most real estate sectors, the rental market has been deeply affected by Covid-19 and landlords around the country have had to adapt quickly in order to make the most of a difficult situation.

According to Jacqui Savage, National Rentals Manager for the Rawson Property Group, these are the four biggest trends hitting the market since lockdown began.

Negotiated payment plans

With countless citizens facing reduced salaries or job losses thanks to lockdown, it’s no surprise that more and more tenants are having trouble paying their full rental. According to Savage, the incidence of tenants defaulting has been climbing since lockdown began, and could continue to be an issue as the economy struggles to recover.

Rather than automatically setting eviction procedures in motion, however, Savage says many landlords are embracing progressive payment plans.

“It’s important to differentiate between a good tenant in temporary difficulty and a tenant with no desire or ability to return to good standing,” says Savage. “In the case of the former, we’d definitely encourage landlords to consider negotiating some kind of payment plan to retain the tenant, rather than having to start from scratch with an empty property in current circumstances.”

Popular plans include rental deferment with repayments starting in September, and agreements enabling landlords to use the tenant’s deposit to wholly or partially cover rent for a limited period. In both cases, Savage says certain criteria will need to be met beforehand, and an iron-clad contract put in place to protect the interests of all parties.

Airbnbs converting to long-term lets

Tourism is unlikely to resume anytime soon, making Airbnbs something of a white elephant for now. As a result, Savage says many Airbnb owners are converting their properties to long-term rentals, competing with those already on the market.

“We started seeing Airbnbs converting to long-term rentals back in February this year,” she says, “and a lot more joined the trend when lockdown began, for obvious reasons.”

Unfurnished properties taking preference

Despite the flood of Airbnbs hitting the long-term rental market, Savage says unfurnished properties remain the most popular choice for tenants – so much so that many Airbnb owners are removing the furniture from their properties.

“Furnished apartments tend to attract much higher rentals than unfurnished,” says Savage, “which is an issue when affordability is a concern, as it is at present. In unsettled times, tenants also like the comfort of having their own belongings with them in their homes, so I don’t foresee furnished rentals becoming more competitive or attractive to tenants in the short term.”

Tech-enabled rental services

While lockdown is temporary, social distancing is likely to be the norm until a vaccine or cure for Covid-19 becomes available. To accommodate this requirement, Savage says top quality rental agents are turning to cutting edge technology to deliver the same level of superior service while protecting landlords’ and tenants’ health and safety.

“We’re very lucky that we already have a powerful, established technology suite at Rawson Rentals,” she says. “Our agents are able to leverage this to offer things like virtual valuations, 3D virtual tours and real-time virtual showhouses.”

Savage says this kind of virtual service offering will be extremely valuable during the pandemic, enabling agents to minimise face-to-face contact and ensure only serious, qualified tenants make it across a rental property’s doorstep. However, she also says it could be an important service differentiator moving forward, opening up rental properties to a far wider national and international tenant pool.

“I think it’s very important for rental agents to think beyond our immediate reaction to Covid-19 and use this time to add value to our service offering long into the future,” she says. “Times are changing, but we have the power to shift that change in a positive direction, making our industry better and more resilient for the long haul.”

 

For more stories like this, Get Estate Life Magazine for free

No Comments

Post a Comment