Supply and demand is what drives the property markets, both in sales and rentals. To get the highest price an agent wants to create scarcity, it is their job. As a side benefit, lots of interest creates opportunity for them (which is why they underquote, but that is a topic for another day!).
Quite often you see in articles or on TV that there is huge demand for a property or rental. Or that something sold for hundreds of thousands above reserve. Let me share with you how you can’t always believe what you read. using a rental property at 31 Bennison Road, Hinchinbrook as an example.
An article on news.com.au reported how there were over 200 people who attended an open for inspection and caused traffic issues on a small street, so much so that police were called in to assist. Let’s say those 200 people were made up of groups 4 as it was a family home so there were 50 parties vying for one spot.
Mayhem: Hundreds of renters turn up to Sydney house inspection.
It sounds to me like the rental market in the suburb must be going crazy. The price was $530 per week I decided to investigate to see if the article was all hype, or if there was a genuine demand in the area. Call me sceptical, but I have seen too many click bait stories over the years or blatant over exaggerating of what actually happened so an agent or media company can gain an advantage.
The scarcity formula in real estate is simple. Are there more renters then homes available or vice versa? Who has the advantage will depend on timing and perceived value. In this case the landlord seems to be in a strong position so they will be able to not only rent quickly but get a premium price.
To test if this was true I emailed an agent with a similar property located just 1.4km away at 62 Corvus Road, Hinchinbrook which was listed at $550. I expected to hear back that it was already leased (given 49 parties missed out on that hot property) but I was told the next open was on the weekend.
Then I got a further email 4 days later to inform me that there was a rental reduction of $20. So much for rentals going crazy in the area. Don’t get me wrong I didn’t view the home to know if there was a major issue but if only a quarter of the people who missed out on the hot property inspected this property it would have been leased immediately.
How often do you see a news article that a certain suburbs prices are exploding, or it is impossible to rent? I say dig a little deeper, you may be surprised to find that the article you read was about clicks and building an agent brand rather than reality.
Quite often you see in articles or on TV that there is huge demand for a property or rental. Or that something sold for hundreds of thousands above reserve. Let me share with you how you can’t always believe what you read. using a rental property at 31 Bennison Road, Hinchinbrook as an example.
An article on news.com.au reported how there were over 200 people who attended an open for inspection and caused traffic issues on a small street, so much so that police were called in to assist. Let’s say those 200 people were made up of groups 4 as it was a family home so there were 50 parties vying for one spot.
Mayhem: Hundreds of renters turn up to Sydney house inspection.
It sounds to me like the rental market in the suburb must be going crazy. The price was $530 per week I decided to investigate to see if the article was all hype, or if there was a genuine demand in the area. Call me sceptical, but I have seen too many click bait stories over the years or blatant over exaggerating of what actually happened so an agent or media company can gain an advantage.
The scarcity formula in real estate is simple. Are there more renters then homes available or vice versa? Who has the advantage will depend on timing and perceived value. In this case the landlord seems to be in a strong position so they will be able to not only rent quickly but get a premium price.
To test if this was true I emailed an agent with a similar property located just 1.4km away at 62 Corvus Road, Hinchinbrook which was listed at $550. I expected to hear back that it was already leased (given 49 parties missed out on that hot property) but I was told the next open was on the weekend.
Then I got a further email 4 days later to inform me that there was a rental reduction of $20. So much for rentals going crazy in the area. Don’t get me wrong I didn’t view the home to know if there was a major issue but if only a quarter of the people who missed out on the hot property inspected this property it would have been leased immediately.
How often do you see a news article that a certain suburbs prices are exploding, or it is impossible to rent? I say dig a little deeper, you may be surprised to find that the article you read was about clicks and building an agent brand rather than reality.
