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Rents dive amid flood of units in Brisbane

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Rents for Brisbane apartments have fallen by as much as 17 per cent over the past six months amid an unprecedented flood of unit ­developments on to the city’s market, according to one of Queensland’s biggest property managers.

Prominent agency owner Andrew Coronis, managing director of Coronis, which operates 23 offices across southeast Queensland, said tenants were moving more readily to get better deals, forcing existing unit stock and “investor-style” apartment owners to cut prices.

Brisbane’s market has suffered a sharp turnaround with a collapse in off-the-plan apartments to one-third of the level compared to last year and strain in the construction industry resulting in builder CMF Projects going into admin­istration.

“We’re seeing a 17 per cent drop in rents and it is happening right now,” Mr Coronis said. “It is between 10 (per cent) and 17 (per cent). Everybody is scrambling to lock tenants down.”

Mr Coronis said gave the example of an older sixpack style unit block in suburban Chermside where previous rental income was about $420-$430 and would now attract between $350 and $360 a week.

Coronis agencies manage more than 8000 properties from the Gold Coast to the Sunshine Coast. Mr Coronis stressed that he was bullish about the long-term prospects of the Brisbane market and said the major oversupply would resolve over the next two to three years. He said high-quality apartments continued to attract strong interest and rents.

The warning comes after Real Estate Institute of Queensland figures showed the official vacancy rate in inner Brisbane was 4.4 per cent, the highest proportion since the global financial crisis. The previous peak was 4.1 per cent in the December quarter of 2013.

Across the wider Brisbane area, the vacancy was 3 per cent, down from the September-quarter peak of 3.3 per cent. The Brisbane city centre vacancy rate was 3.7 per cent.

A report from Place Advisory released this month showed Brisbane’s off-the-plan sales have fallen to the lowest level since June 2011. Last quarter there were 272 unconditional transactions, a 13.7 per cent drop since the previous quarter.

Mr Coronis said the uptake of investors in the new-build sector in the city’s unprecedented apartment-development rush over the past three years had led to fewer investors scoping the market.

But he said there were no more distressed sales than usual because people continued to extract a reasonable yield in the low interest rate environment.

“The benefit for the community is the affordability,” he said. “Until the surplus gets taken up it will be a great time for renters.”

The changing market dynamics have spurred Coronis to change its approach to property management, placing a greater emphasis on assisting tenants through the rental process.

Originally Published: http://www.theaustralian.com.au/

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Property Management

Brisbane has fewer properties for rent but vacancy rate still high

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Brisbane has fewer properties for rent but vacancy rate still high

There are fewer homes for rent in Brisbane than a month ago, new figures show. Picture: Thinkstock.Source:ThinkStock

THE number of properties available for rent in Brisbane is shrinking, but it still has the second highest residential vacancy rate of any capital city in the nation.

Data released by SQM Research reveals the Queensland capital’s vacancy rate slipped to 3.2 per cent in March, with 10,246 properties available for rent — down from 3.4 per cent in February.

But the Brisbane rental market is not nearly as tight as some other capital cities, with Hobart and Canberra both sitting on a vacancy rate of just 0.6 per cent.

Brisbane has fewer properties for rent but vacancy rate still high

Brisbane’s vacancy rate slipped to 3.2 per cent in March, according to SQM Research.Source:Supplied

Only Darwin has a higher vacancy rate at 3.6 per cent.

SQM Research managing director Louis Christopher said asking rents were also rising in some capitals, particularly in Melbourne.

“Reflecting the tight rental conditions in Melbourne, asking rents for houses were up by 1.1 per cent over the month to 12 April 2018, while asking rents rose 4.7 per cent over the year,” Mr Christopher said.

“We can expect continued strong growth given the high population growth that Melbourne is currently experiencing, creating rental demand.”

Brisbane has fewer properties for rent but vacancy rate still high

Rental vacancy rates fell nationally in March, new research shows.Source:News Limited

 

But in Sydney, the vacancy rate is higher than it was a year ago and asking rents are falling as a result.

Capital city asking rents rose by half a per cent nationally last month to $563 a week for houses.

Unit asking rents rose 0.2 per cent to $443 a week.

The asking rent for a three-bedroom house in Brisbane remains at $447 a week, while for units it stands at $366 — the same as a month ago.

Brisbane has fewer properties for rent but vacancy rate still high

The average weekly asking rent for a unit in a capital city in Australia is $443. Photo: AFP/Greg Wood.Source:AFP

Source: www.news.com.au

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Property Management

Brisbane renters: You’ve got it cheap, new report shows

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Brisbane renters: You’ve got it cheap, new report shows

Think you’re paying a lot in rent? If you’re in Brisbane, chances are you’re paying less than those living on the Gold Coast, Sunshine Coast and even Redland.

New figures from the Domain Group’s March quarter Rental Report show Brisbane is one of the cheapest capital cities to rent in the entire country, beaten only by Adelaide and Perth, while rising rents in other parts of south-east Queensland have well and truly outstripped Brisbane’s lacklustre rental market.

In the Brisbane LGA, rents have remained flat the entire past 12 months. The median asking rent for houses is still $450 a week, with no yearly or quarterly change. Units have also remained flat over the March quarter, at $390 a week, dropping only slightly by $5 a week since the same time last year.

Brisbane renters: You’ve got it cheap, new report shows

Units in the Redland LGA are attracting higher rents than those in Brisbane, according to the new Domain report. Photo: Reinhard Dirscherl / Alamy

Meanwhile, on the Gold Coast, the median asking price for a rental house has risen by 6.5 per cent over the past year to hit $490 a week – that’s $30 a week more than this time last year.

Unit rentals have also gone up on the glitter strip by nearly 5 per cent to $430 a week, making the Gold Coast the most expensive region to rent a property in south-east Queensland.

Houses on the Sunshine Coast have a median asking rent of $490 a week, while units in Redland are asking $400 a week. In Ipswich, house rents have increased by 2.9 per cent and units by 3.7 per cent over the past year.

Brisbane renters: You’ve got it cheap, new report shows

Units and houses on the Gold Coast have the highest weekly median rent asking prices of any of the south-east Queensland LGAs.

But the news isn’t all bad for Brisbane. Stagnated rents were a welcome relief from the ever-increasing cost of living, according to national research manager at PRDnationwide, Dr Diaswati Mardiasmo.

“While these figures may not look particularly exciting, the thing that stands out for me is how affordable Brisbane is,” Dr Mardiasmo said.

“The cost of living is continually going up – rises in electricity, rises in rates, rises in water bills and private health – so to hear that your rent is staying the same will be a relief to so many tenants.”

WEEKLY MEDIAN ASKING RENTS (HOUSES)
MAR-18DEC-17MAR-17QOQ%YOY%
Brisbane$450   $450 $450 0.0% 0.0%
Gold Coast$490$480$4602.1%6.5%
Ipswich$350$350$3400.0.%2.9%
Logan$365$365$3600.0%1.4%
Moreton Bay$385$385$3800.0%1.3%
Redland$447.50$450$434-0.6%3.1%
Sunshine Coast$490$490$4800.0%2.1%

And tenants who are not stretched financially are far more stable, which benefits landlords too, she said.

“I’m looking at it from the perspective of the renter who can have that stability and affordability but you know, this lack of price increase also benefits landlords,” she said.

“When rents don’t go up, tenants stay where they are. When rents go up, often they’re forced to move out because they can’t afford to pay more. When that happens, often the landlord is left with a vacant property before they can find a new tenant, which is a lot worse.”

Amid the widely publicised unit oversupply and falling unit prices, rental yields have held strong.

Brisbane unit yields sit at 5.06 per cent after strengthening by 2.8 per cent over the March quarter. Yields are also up 1.3 per cent year-on-year.

“When you consider the fear of oversupply and the vacancy rate, these figures are actually quite heartening,” Dr Mardiasmo said.

“There’s been a lot of negative commentary surrounding the unit market in particular, so from an investors point of view, the fact that yields are holding well is comforting.

MEDIAN WEEKLY ASKING RENT (UNITS)
Mar-18Dec-17Mar-17QoQ%YoY%
Brisbane$390$390$3950.0%-1.3%
Gold Coast$430$420$4102.4%4.9%
Ipswich$280$280$2700.0%3.7%
Logan$300$300$3000.0%0.0%
Moreton Bay$315$315$3200.0%-1.6%
Redland$400$395$4001.3%0.0%
Sunshine Coast$390$395$380-1.3%2.6%

REIQ zone chairman Andrew Henderson conceded the Gold Coast was fast becoming a difficult market to break into, for tenants and buyers alike.

“What’s changed recently is the buyers. We used to have 50-50 owner-occupiers and investors but these days 80 per cent of our buyers are owner-occupiers,” he said.

“What that means is that properties that used to be rentals are now being bought by owner-occupiers; the pool of rentals is shrinking.

“At the same time, you’ve got strong migration, so the demand for rentals is increasing. It’s super competitive for applications. And of course, as the cost of renting increases, it’s harder to save to buy a property.”

Dr Mardiasmo said that overall, the Brisbane rental market was “where it should be”.

“I would say to people in Brisbane: look around you. There are other capital cities where people have to commute for an hour-and-a-half just to get to their workplace.

“In Brisbane you only need to live 15 to 20 minutes out to be able to afford a place and still be able to live. We don’t need to wish for figures that make headlines, our situation right now is quite nice.”

Source: www.domain.com.au

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Property Management

Asking rents for houses remain flat for Brisbane over December quarter: Domain Group

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Asking rents for houses remain flat for Brisbane over December quarter: Domain Group
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