Canberra Rental Market - Is it Trending Down

[VYBerlinaV8]

Always brings up the same question though, when will they decide that the "big drop" is over and dip their toe in the water? Canberra is a funny place, any talk of cuts in the APS and the locals cry blue murder like it's the end of the world.

I put a call through to the PM today. She's working with one of the agents to arrange an appraisal for some stage in the next week - will be interesting to see if it meets expectation.

Canberra has definitely softened off over the past year or two. There are usually enough public servants with a few bucks ready to buy when things get cheap, though, and this tends to stabilise things.

That said, Canberra is still kinda expensive, and has some adjusting to do.

 

[Jamie M]

There's plenty of Canberran's that would promptly capitalise on any significant decrease in price - be it first home buyers or investors. So any drop in prices won't last long because demand would quickly rise again.

The talk of APS job cuts is not new in Canberra.

APS job cuts usually just mean big VR payouts - and those who opt out usually turn up in the APS again shortly after, usually via recruitment companies until their eligible to become ongoing employees once again.

Cheers

Jamie

 

[Jamie M]

There are usually enough public servants with a few bucks ready to buy when things get cheap, though, and this tends to stabilise things.

Exactly my point.

Cheers

Jamie

 

[13andcounting]

There's plenty of Canberran's that would promptly capitalise on any significant decrease in price - be it first home buyers or investors. So any drop in prices won't last long because demand would quickly rise again.

The talk of APS job cuts is not new in Canberra.

APS job cuts usually just mean big VR payouts - and those who opt out usually turn up in the APS again shortly after, usually via recruitment companies until their eligible to become ongoing employees once again.

Cheers

Jamie

I guess they are only public servants - they might not consider or understand old talk about catching falling swords and such.

I guess for your bread and butter you'd be hoping that it doesn't pan out too bad. Probably be more refinancing and turnover if prices were going either way rather than staying stagnant like now wouldn't it?

 

[VYBerlinaV8]

I guess they are only public servants - they might not consider or understand old talk about catching falling swords and such.

I guess for your bread and butter you'd be hoping that it doesn't pan out too bad. Probably be more refinancing and turnover if prices were going either way rather than staying stagnant like now wouldn't it?

Stagnation is exactly what I'm expecting in Canberra for the next few years. We've had a good 2 or more years already, and I think we have at least another 3 to go, maybe as many as 6.

I expect the 2020's to be big in Canberra. I think property prices will double during that decade.

 

[13andcounting]

Stagnation is exactly what I'm expecting in Canberra for the next few years. We've had a good 2 or more years already, and I think we have at least another 3 to go, maybe as many as 6.

I expect the 2020's to be big in Canberra. I think property prices will double during that decade.

Yeah, the place hasn't been seeing much growth of late, I guess probably won't over the next few years either.

2020's could be interesting, but it will depend on whether the Government of the day has a centralised view of the bureacracy. With the NBN we'll all be able to live in Coober Pedy and be remotely based neuro-surgeons!

 

[Jamie M]

I guess they are only public servants - they might not consider or understand old talk about catching falling swords and such.

I guess for your bread and butter you'd be hoping that it doesn't pan out too bad. Probably be more refinancing and turnover if prices were going either way rather than staying stagnant like now wouldn't it?

The vast majority of my clients are based interstate.

Having said that, I haven't seen the level of buying activity slow down in terms of the business I write for ACT clients. First Home Buyers have slowed - but still plenty of investors and upgraders buying.

Cheers

Jamie

 

[sash]

Hoping the coalition gets in....the market will move downwards as a result.

I hope at that point to jump in....whilst coalition is making noises about cutting it is unlikely to be larger as they usually overestimate the possible savings.

I'm not holding my breath.

There's always talk of APS job cuts and subsequent property price drops.

A lot of people are "waiting" for the election before they jump in. This could cause a spike in buying activity and prices going into this summer, especially if rates drop again.

Cheers

Jamie

 

[weg]

I think if a lot of non long term public servants (like the more recent recruits in the Climate Change Dept. who will be banished) were to go you'd more than likely see rents drops than house prices - although in this economic climate housing prices in many areas are stagnating or dropping in some cases where they've had recent good growth.

The impression I get from what i've read is many PS who have been recruited from interstate rent a house to live (or share) and fly home to their families on weekends especially if from the eastern states - one of these is a family member of mine whose primary home is in Melbourne.

There have been quite a few pollies own IP's there as well and they rent them out to other PS and pollies colleagues.

 

[13andcounting]

I put a call through to the PM today. She's working with one of the agents to arrange an appraisal for some stage in the next week - will be interesting to see if it meets expectation.

The agent got back to me today, the appraisal came in where we expected it to. The PM reckoned the other day that we won't be able to ratchet up the rent this year - she's even had a few cheeky ones ask for a rent decrease! Anyone been asked for rent reductions in Canberra?

Might just be time to let it go.

 

[TheMarket]

If Canberra get hit this time it wont be like the last time...I reckon it be pretty bad... the book has changed..

the last time, debt level is low, house is cheap, yield is decent ... and the mining boom rockets is firing and reading to lift off ... and the Lib paid off the public debt

this time high debt, expensive house, low yield and on top of that we got a public debt that start to go higher and higher each year and mining investment peak late last year and it has been decreasing around 5-10% this year and for some foreseeable future.

is that an environment for growth? I cant predict but with this logic stagnation or correction is on the way....

 

[13andcounting]

If Canberra get hit this time it wont be like the last time...I reckon it be pretty bad... the book has changed..

the last time, debt level is low, house is cheap, yield is decent ... and the mining boom rockets is firing and reading to lift off ... and the Lib paid off the public debt

this time high debt, expensive house, low yield and on top of that we got a public debt that start to go higher and higher each year and mining investment peak late last year and it has been decreasing around 5-10% this year and for some foreseeable future.

is that an environment for growth? I cant predict but with this logic stagnation or correction is on the way....

It is (or will very soon be) on the market. Not many good places to put your chips at the moment, so paying down debt will be on the top of the agenda.

I laughed a bit at the advertising of this mob today: http://iloverealestate.tv/training/

I'm particularly bemused at the "simplicity" of the following analytical tool...

Economic Clock Reveals We're At The Starting Line of Yet Another Property Boom

... if only it were that simple!

 

[TheMarket]

They exist in all markets, properties, shares, commercial, business

Smart investors know when to buy, hold and fold

 

[13andcounting]

They exist in all markets, properties, shares, commercial, business

If I can take you out of context...
... You mean unscrupulous b*st@rds that are trying to find every possible way to get a dollar out of you? Yes, they do exist in all markets. If this mob believes, as on their clock, that shares are about to "rise" and commodities are about to "rise", why do they not focus any effort on getting a long exposure to these markets? Do they not see the benefits of diversification?

Smart investors can make money in all markets (and all market phases), they don't need to wait for a clock to strike 6:00 and then gear into property. After many years, I look forward with hope to one day being able to stand shoulder to shoulder with a smart investor, only time will tell whether I will ever identify myself as one.

 

[TheMarket]

This will be good for Canberra cheap house

http://www.theage.com.au/business/the-economy/boom-time-over-deficit-balloons-20130802-2r423.html

 

[13andcounting]

The agent got back to me today, the appraisal came in where we expected it to. The PM reckoned the other day that we won't be able to ratchet up the rent this year - she's even had a few cheeky ones ask for a rent decrease! Anyone been asked for rent reductions in Canberra?

Might just be time to let it go.

Just wanted to ask again, anyone else been asked for a rent reduction in Canberra? Apparently the going cut to get another lease signed is about 5%!

 

[Jamie M]

I actually had someone offer higher than the advertised rent for the last IP we rented out 3 months ago.

I'm sure that's unique though -it appealed to a certain niche and there weren't a lot of properties like ours available in that area.

Cheers

Jamie

 

[geoffw]

Supply is up, vacancy rates are higher, so rents are down. Except for Jamie's place ;-)

 

[rohan22no]

Guys,
Remember it was only a year or two ago that we were hearing about the "rental crisis" in Canberra. Sure, its softened since then, but it still seems reasonable. Also, its winter at the moment, not a whole lot of people are moving around. End of the Year and start of the new year tends to be where the tenants start moving in.

I think the election result will have an affect, but I cant see it being too long lasting. I think rents might drop 15-20% as a worst case scenario, and while it wouldn't be great for us IP owners, its hardly disastrous.

We're in the capital city of Australia! Things will get better, before we know it they will be talking of tightening rental demand once again.

 

[TomW]

Department of Health has announced 400 jobs to go and Agriculture has announced 300 so looks like the only way is down.