An industry leader has warned that rising vacancy rates are the new norm and agencies need to act now if they want their rent rolls to continue growing.
Starr Partners CEO Doug Driscoll says vacancy rates are rising across Sydney and will continue to do so.
“This isn’t a blip. This is the new norm as we head into 2017 so get used to it, adapt to it and understand what you can do internally to address the new landscape,” Mr Driscoll told RPM.
He said he “wasn’t surprised” about the rising rates, although he expected them to happen later in 2017.
Vacancy rates in Starr Partners rose from around 1 per cent this time last year to 2.5 per cent. Mr Driscoll said he believes other networks are experiencing similar trends which he expects will continue in 2017.
He suggested property management departments tackle the problem with education.
“We’re not slacking, we’re not working any less, it’s just the market. Agents need to educate their landlords because there’s more choice. With all the new apartments being built, it was a matter of inevitability [that vacancy rates would rise],” Mr Driscoll said.
“We need to look at educating landlords better, realigning their expectations around price and educating them in regards to the market as a whole. Also, encouraging them to make certain improvements to make their property more attractive and enticing as a rental proposition,” he said.
Agencies can also upskill their property managers to enable them to better market their properties and educate their landlords.
“Be on the front foot and make the necessary internal adjustments and improvements now to ensure we minimise rental vacancies in the new year. We also need to upskill the staff conducting the viewings, as a more competitive lettings environment dictates that these people need to be more sales-centric in their approach,” Mr Driscoll said.
“If we don’t make these changes, then we’ll start losing managements,” Mr Driscoll said.