I am excited to tell you that with 2009 now behind us, we anticipate 2010 to be a more prosperous year for our property investors with rent increases in the vicinity of 5.0% to 7.0% expecting during the year. This equates to $26.00 to $36.00 dollars respectively on the average rent of $521.00/wk across our portfolio.
During 2007 and 2008 calendar years we saw the average rent on our portfolio increase from $428.00/wk to $496.00/wk, representing a total combined gain of 15.9%. Over 2009 we saw rents remain static at approximately $500.00/wk. (Refer to graph)
During January we received increased enquiry levels from existing tenants with the desire to renew their lease in the hope of avoiding a rent increase. I believe this to be a result of the increased media coverage of the tight rental market and knowledge of continued interest rate rises along with the prospect of more.
You will be glad to know that if your tenant is currently on a continuing agreement (month to month) or lease is about to expire, we will be reviewing the rent during February and March.
Typically rents are reviewed 60 to 90 days prior to lease expiry and every 6 months for tenants that are on a continuing agreement. It should be noted that increases are on a case by case basis as we do have a number of tenants paying higher than current market rents from late 2008, before they eased off in 2009.
In the next monthly market update we will be in a better position to advise on a likely shift away from 12 month leases, to the recommendation of 6 or 9 months allowing for more frequent rent reviews.
Until next time, take care.
