If there’s one thing that shifts more than the housing market, it’s tenants’ preferences. From post-pandemic consequences to a generational sway in priorities, staying on top of these ever-changing trends is a surefire way to ensure you get the most value out of your property. Here at The Rent Shop, we like to keep our fingers on the pulse and have analysed some recent factors that are influencing the current housing demand. Let’s dive into these insights so you can continue to enhance tenant satisfaction and maintain a competitive occupancy rate.
Evolving Tenant Preferences
Space and Layout
While COVID-19 is in the past, it’s had a long-lasting effect on the future of tenant preferences. Since the pandemic, many have adapted to remote working with six in ten people occupying a role where it’s possible to work from home. This shift demands more flexible living spaces as tenants search for properties that have offices. While a designated office space might not be plausible for every property, it’s important to highlight adaptable rooms. For example, a large open-plan lounge that has space for a desk, or a small bedroom that might be converted to an office for professional working couples. In doing so you focus on remote working compatibility which is a key way to expand your tenancy demographic.
Amenities and Features
Certain amenities are essential for enhancing the work-from-home experience. In today’s digital age, high-speed internet is a necessity for all tenants, not just remote workers. There’s nothing more frustrating than a lagging email or a buffering Netflix stream. These seemingly minor issues can accumulate over time, significantly impacting tenant satisfaction.
When considering additional amenities, it's crucial to recognise the growing trend towards eco-conscious living. Energy-efficient appliances and smart home technology not only save money but also appeal to a wide range of tenants by benefiting the environment. Moreover, outdoor spaces such as gardens or balconies have become highly desirable, especially in the post-pandemic world. Many tenants value the fresh air and secure 'outdoor' time that a garden offers, alleviating concerns about potential future lockdowns or health crises.
Location Preferences
While urban centres always remain popular due to their convenience and abundance of job opportunities, there’s been an increasing shift in appeal towards suburban areas as tenants seek more space and modern housing. After the pandemic, towns on the West Coast have seen an impressive growth in value such as Reefton with an 83% increase and Greymouth with a 75% increase. To put this into context, Greymouth only grew by 7.5% in value over the four years leading up to the pandemic. This means it’s skyrocketed to an exponential level, and is likely to continue to grow. Up-and-coming neighbourhoods such as New Brighton in Christchurch and areas near Queenstown like Arrowtown are becoming more appealing to tenants as they’re convenient and close to more populated areas without the hefty price tag.
Lifestyle Changes Influencing the Housing Demand
To get the most out of your property, it’s not enough to simply know the trends. You need to understand why they’ve evolved in order to both cater to current demand and predict future changes. For example, sustainability is no longer just a buzzword; it's a key factor influencing housing demand. Tenants, especially younger generations, are increasingly prioritising eco-friendly properties. This means Landlords who invest in sustainable upgrades will not only contribute to environmental conservation but also tap into a market of environmentally conscious renters.
Health and wellness have taken centre stage in tenant preferences. In the wake of the pandemic, there is a heightened awareness of the importance of living environments on overall well-being. Tenants are looking for properties that offer good ventilation and ample natural light. When it comes to apartments, amenities such as gyms and pools are a great addition. Homes that provide these features promote a healthier lifestyle and can significantly enhance tenant satisfaction not just for the current market but for the future.
Sustainability and wellness are here to stay, making them wise long-term investments for savvy landlords.
Demographic Shifts
Millennials and Gen Z
We’re all familiar with the stereotype that millennials aren’t investing in houses. However, this couldn’t be further from the truth. Recent research shows that millennials have surpassed baby boomers as the top demographic of new home buyers. This means investors looking to sell to millennials or landlords wanting to make their homes more appealing to this younger generation should consider their preferences.
Millennials value connectivity, convenience, and communal living spaces. They are tech-savvy and look for properties equipped with smart home technology and high-speed internet. Additionally, they prefer locations that offer easy access to urban amenities such as restaurants, cafes, and public transportation. Communal spaces, such as co-working areas and social lounges, are also highly attractive to this demographic. Those who can provide modern, connected, and communal living environments will be well-positioned to attract and retain Millennial buyers and tenants.
Ageing Population
However, in an attempt to accommodate the younger generations, too many landlords overlook the ageing population. There’s a market of elderly people looking to downsize from their current house into a more accessible area. This demographic shift requires properties designed with the elderly in mind, such as ground-floor apartments, elevators, and features that enhance mobility and safety, like grab bars and walk-in showers. Additionally, proximity to healthcare facilities, public transportation, and shopping centres is highly valued by older tenants.
Implications for Landlords
To stay competitive, landlords should focus on strategic property upgrades and effective marketing. Adding versatile home office spaces and enhancing energy efficiency with eco-friendly appliances can significantly boost tenant appeal. Installing smart home technology like thermostats and security systems also adds modern convenience. For marketing, high-quality photos and virtual tours are essential to showcase these new amenities. Remember to always emphasise energy efficiency and home office capabilities in listings to attract remote workers and eco-conscious tenants.
For tenant retention, prompt maintenance responses and regular feedback surveys are crucial. In fact, according to studies more than a third of tenants would renew their lease with an increase in rent provided they had a good relationship with their landlord. So, how do you build a strong relationship with your tenants? It starts with prompt responses and investing in quality amenities, like faster Wi-Fi, which shows you care about their comfort and convenience. Creating communal areas and organising tenant events can also foster a sense of community, making tenants feel more connected and valued. By embracing these strategies, landlords can significantly boost tenant satisfaction, improve retention rates, and ensure that your property remains a desirable place to live.
Conclusion
Understanding and adapting to tenant preferences is not just a smart strategy—it's essential for staying competitive in the rental market. As tenant demands evolve, so must the properties offered. But staying ahead in the rental market is easier said than done, it requires continuous effort and expertise. That’s why we’re here to help. At the Rent Shop, we specialise in understanding these trends and helping landlords and investors implement effective strategies. By partnering with us, you can ensure your properties remain attractive and meet the ever-changing needs of your tenants. Reach out to The Rent Shop for professional property management services and expert guidance tailored to your specific needs.
