As the media reports on a rental crisis, vacancy levels are starting to climb and rents are softening.

When it comes to the property sector, we pride ourselves on being ahead of the game, staying ahead of the data and media coverage. Over the past year, we’ve witnessed an incredibly strong rental market that brought about the sharpest rental gains in recent memory. Vacancy rates plummeted, and the entire nation labelled it a housing crisis. Moreover, Australia is experiencing a migration boom, with most newcomers flocking to Sydney. But here’s the thing: there’s a whole new story unfolding that hasn’t made it to the headlines. Rental vacancy levels are creeping up, and rents are starting to soften. Why? Well, it could be due to the seasonal ebb and flow or an overstimulated market that pushed rents to the brink. We’ve noticed tenants locking in longer-term leases for stability, while others are moving to more affordable regions. Maybe the media hype is keeping some folks away too, with young adults staying longer with their parents and others sticking to share accommodation. It’s safe to say that sentiment has shifted, and it’s time we talk about it.

In the property world, sentiment drives the show. We’ve all seen how the mood of the market influences our buying decisions. Well, guess what? The rental market has received an overwhelming amount of attention lately, and it has spooked many active renters. But here’s the silver lining: we’re witnessing a change in sentiment, the tipping point of rental growth in this cycle. With fewer people in the market and fewer rental applications, landlords need to be more selective during rent reviews. Sure, there are still some properties that spark fierce competition, but the real shift is happening among the cream of the crop.

We’ve already made adjustments and are guiding our clients through these revised conditions. Let’s face it, the property market has thrown us all for a loop in the past few years. Even the big shots like the RBA and the major banks can’t seem to predict what’s coming. Just when they think they’ve got it all figured out, the market takes a wild turn, leaving them scrambling to recalibrate their forecasts. So, what have we learned from all this? The key is to operate in shorter cycles, about 30 days at a time. Trying to forecast too far ahead will only leave you with egg on your face. That’s why on-the-ground intelligence is priceless. We often experience entirely different conditions from what’s reported or what the historical data suggests.

As the property landscape continues to evolve, it’s crucial to uncover the unreported shifts that shape the market. The changing rental dynamics, including rising vacancy levels and softer rents, call for an adjustment in our strategies. By recognising the power of sentiment and making informed decisions based on on-the-ground intelligence, we can navigate this ever-changing rental landscape with confidence. The property market is a wild ride, and staying ahead of the game means staying informed and adaptable.