Renting is just as competitive as buying right now, but why?
If you’ve been looking for a house for rent in Mount Barker or any of the popular Adelaide Hills suburbs, you’ll understand this situation. You’re putting in multiple applications but not getting the house you want. You’re thinking, ‘but I’m only renting. It’s not like I’m buying a house.’
COVID-19 has undoubtedly caused plenty of people to put their houses on the market, given both economic fears and high demand for properties.
The renting and buying spikes
It isn’t just the Adelaide Hills or South Australia that are experiencing such a competitive market. It’s happening nationwide. A recent article states it’s cheaper to buy than it is rent. Record low interest rates have made buying 55% cheaper than capital in major cities, including Adelaide.
It’s been heralded as a ‘once-in-a-generation opportunity for renters to move into home ownership.’ In Mount Barker, a three-bedroom house sells for approximately $370,000. That same house rents out at $370 per week. With a 10% deposit, that $370,000 mortgage would come to about $1,380 per month, which is $100 less than the monthly rent.
Another article says tenants are paying $10 more each week for a house for rent, compared to 2019. So, not only are we seeing a surge to buy (because of low interest rates), renters are competing against more people, and paying more when they secure a property.
However, the slight rental yield is good news for landlords. They’re marginally better off, reaching 4.45% better, compared to 4.39% this time last year. Adelaide, Perth and Hobart were the only capital cities to record higher rental yields.
Dealing with ‘renter rejection’
While you expect the houses for sale in the Adelaide Hills to be competitive, the rental race has changed this year. Many wonderful candidates are being knocked back on their rental applications, simply because of the volume of people.
In fact, 41% of renters say competition is the toughest part of the process of securing a home – followed by the bond (19%) and completing the application (14%). It’s important not to take the rejection personally but, rather, as part of the process.
To buy or rent?
Real estate in the Adelaide Hills is a smart investment, but frustration with the rental market should not be the reason you buy a home. Yes, this is a historical time in real estate and if you’re in a position to buy a house in Mount Barker or one of the growing surrounding suburbs, it’s a smart choice. But make sure you have the right motivation and know the reasons why you want to own a home.
Are you financially and emotionally ready? Is home ownership in the future plans? Sit down with local real estate agents in the Adelaide Hills and go through your options. Whether you decide to rent, buy or invest, the Nitschke Real Estate team can help find your dream (temporary or forever) home.
