Wagga’s rental market has softened even as sales surge ahead, with more than 300 properties sitting empty.
According to Domain, there were 49 rentals on offer for less than $200 per week, while there were an additional 130 available for those who could stretch the budget to $300 per week.
Wagga Property Management director Dave Skow said the numbers on offer were because there was an oversupply of houses and a lack of demand.
“We always see a bit of a glut at this time of year, it’s such a cyclical market because of defence, the hospitals and the university, so the peak season is November to January,” Mr Skow said.
“But this year is quieter for a couple of reasons I can see: Interest rates are so low that investors are getting no real return on money in the bank so they look at property, but that also makes lending affordable. So you’ve got investors seeking a better return but also first home buyers exiting the tenant pool and so you’ve got an increase in stock and a drop in demand.”
Mr Skow said rental prices had softened by more than 10 per cent. One of the properties on his books had been vacant for eight weeks, despite a $30 drop in the weekly price and a free week on offer.
“It’s a bit of a concern, this disparity won’t just be corrected by the summer uptake,” he said.
“It will be interesting to see what will happen, especially as seasoned investors sell up and cash out of the market.”
Wagga landlord Cathy Southwell had recently sold two cheaper properties within a week of listing them, which she believed was a sign of a strong sales market. However, she had a different reason why there were so many empty houses.
“The main thing I’ve noticed with younger friends is that people on lower incomes are choosing to share because rents were too high,” Ms Southwell said.
“More people who might have rented a three bedroom home by themselves in the past can’t afford to.
“Something under $200 is what hospitality workers and students can afford, but if they want a safer suburb they might choose to share.”
Robyn Rossiter from LJ Hooker pointed out the 300 vacancies were small compared to the 500 on the market last Christmas, but there was a lot more stock on hand for property managers.
“We are certainly feeling the rent go backwards, particularly with older properties as new ones come onto the market,” Ms Rossiter said.
“We’re telling landlords to be proactive in moving their properties, such as laying new carpet, putting in built-ins or adjusting the rent.”