Properties available for rent in Bermuda have been on the increase over the past few months, with inventory rising by about 30 percent this year over each of the last two years.

That is according to Susan Thompson, agency manager at Coldwell Banker Bermuda Realty, who said in her latest newsletter that the rental market was buzzing, while most of the recent activity was in the $4,000 to $7,000 range.

She said, due to the increased availability, tenants had a bigger choice of properties and therefore landlords were able to negotiate more on the cost of their rents, with the average rental price at $5,285.

"The rental market is busy and buzzing, but as with all sectors of the economy, there is an element of caution amongst consumers," said Ms Thompson.

"The majority of prospective tenants are currently in Bermuda and looking for alternative accommodations, rather than the previous market of majority new arrivals.

"Most of the recent rental activity is in the $4,000 to $7,000 range and naturally there is always interest in the $4,000 and below market.

"If there is an area of drastic change, it is at the high-end with demand for executive homes significantly lower than it has been in recent past."

Ms Thompson said there had not be an above normal number of tenants breaking their leases prior to their expiration as a result of leaving the Island and that while Coldwell Banker's inventory had risen approximately 30 percent over 2003, 2006 and 2007, the levels were on par with 2004 and down 33 percent from its record year of 2005.

During 2005 a large number of Bermudian investors bought new condominiums, which dramatically increased rental supply, but these were quickly absorbed into the market, she said."With the increase in supply, many tenants are comparison shopping, looking at a far greater selection of properties before making a decision," she said.

"This has caused landlords to offer rents that are more negotiable and tenants to feel more confident in their ability to secure desirable accommodations without overextending their budget.

"Additionally, we are spending a great deal of time showing properties to tenants who are looking at their existing lease coming up for renewal and wanting to compare where they are to what they can get for the same, or less, rent in today's market.

"With all the 'shopping for bargains' and landlords being somewhat flexible in pricing, it is interesting to note that the overall average rental price is $5,285. This figure compared to same time period in 2007 is nearly dollar for dollar with the average in 2007 from January to October of $5,300.

"The most significant variance in the rental market is DOM (Days On the Market) with an increase of 27 percent over last year."

But Ms Thompson said the rental market was cyclical and changed very rapidly, so what was happening in today's market could be completely different in three weeks' time.She said the long-term market outlook depended on the world economy, new start-up companies coming to the Island and the stability of the local economy, while President-elect Barack Obama's victory in the US presidential elections has given the world hope that things will turn around in the US and follow suit elsewhere.

"While there is caution in the market right now, there are no facts or figures that point to a severe downturn," she said."The simple economics of supply and demand can change instantly with the influx of new business to the Island and change the outlook for Bermuda's rental market overnight."