With the media currently enjoying tossing around the prospect of our economy falling into recession in 2024 (they love using words like “teetering” and “about to plunge”), we thought it would be a good idea to do our own research into the implications for rental property owners if a recession was declared.
Because it has been quite some time since we’ve had one.
Well, except for the recession in 2020 due to the impact of COVID-19. Before that though, we enjoyed nearly 30 years of economic growth in our part of the world.
And let’s face it, there was so much else going on during the pandemic, our lives were so topsy-turvy at the time, it’s very hard to compare – the world (and our economy) looks very different now.
When we asked ChatGPT, Google and a few other research tools what a recession in 2024 would mean for rental property owners, this is what they came up with:
- Increased Renter financial stress
- Downward pressure on rents, especially in higher-priced segments
- Difficulty finding new renters who meet affordability criteria
- Refinancing challenges
- Increased competition in the rental market
- Government intervention with increased regulations or renter protections implemented
There were also a few other random inclusions, but these were the common suggestions.
Hmmm, it all feels very familiar. In fact, this is exactly what the rental property market experienced in 2020, meaning we don’t have to rely on our Grandparents to advise us on how to navigate these uncertainties, we’ve been here before.
And what was confirmed only a few short years ago, is that whilst a recession presents challenges, rental properties remain a relatively stable investment during economic downturns. Housing is a basic necessity after all.
Please don’t think we are making light of a difficult situation or that we don’t understand the implications of what a recession could mean for many of our clients. This is definitely not the case.
Being the owner of an investment property is not easy during the best of times and our current economic situation is definitely making it so much harder.
This is simply our way of reminding you that this is not new territory for us and that we are here to support you through any challenges that may arise when it comes to your property, regardless of how our economy looks.
