Gladstone rental market

mattnz

mattnz

Hi all,

I have a couple of development sites in Gladstone, so have been following the rental market closely.

I was expecting the rental market to ease a bit when the Calliope workers camp came online in September, but have been slightly surprised at how many rentals are coming onto the market.

4-5 months ago there were approx 60 rentals available, now there are around 220 on realestate.com.au.

Interested to hear the thoughts of others on what is likely to happen moving forward.

My personal thoughts are that the rental market could ease a bit more, while the workers camps are coming online, but that they will be fully occupied from mid-2012 when the rental market should have basically a zero vacancy rate.

I would actually love to have the job of ensuring there is enough accommodation for a company like Bechtel. Having full visibility of the workforce arrival timing, temporary accommodation, and standard rental market would be invaluable for the developments I am doing. Does anyone know of any contacts that would be able to assist me with getting a role like this? I am doing my best to track this anyway, so I might as well get paid for it :)

Thanks,
Matt
 
Hi Matt

My thought's on the Gladstone rental market are as you said easing at the moment but still it's still a pretty low vacancy rate. I've been watching like a hawk of late too.

I think this is partly because of the worker's camp but also because the LNG plant's aren't in full swing of construction as yet, still mostly earth works, building camps and minimum steel work going up.

Having been in the construction industry for the passed 10 years this is typical coming up to Christmas most companies won't man up around this time due to holiday's and everything slowing down for the festive season. So it's seen as a bit of a waste of time generally.

I think that after the new year about Feb/march things will turn around fast and the rent's/capital gains will far out strip 2011.

In saying all that just in the last week I have had four brand new dwellings come onto the rental market of my personal stock out of my current development. I had three companies and two real estates go through to gauge rental interests. One company took the lot for $400 more per week on each of them than the real estates were looking to advertise them at giving me a tidy 16% return so pretty happy about bagging that one.

After speaking to a lot of companies about taking out leases most of them don't want to know about you until you have the product ready to go so it does make it hard to line up someone in advance.

A lot of the bigger companies like bechtel / Vodi and the LNG mobs have caps on what they can go to on rental's this changes and goes up with the market slowly but as they are big companies it all takes time. In my experince a major sub-contractor of someone like bechtel are the go as they don't seem to have as much red tape to get through for doing side line deals.

Out of interest someone I know who is a big player in a local Gladstone industry, looked at taking beds at the new worker's camp and the cost is $188 per night per person, this includes food though.

$188 x 7 days = $1316 per person a week, so he is looking to take on three/four bedroom low/no maintenance dwellings and sticking three guys in them which he will save a loads. Geat for investors.

cheers
 
Phil_H said:
QUEENSLAND'S mobile army of workers cashing in on the mining boom has topped 35,000 in what is being described as one of the biggest social and economic movements in the state's history.

Mining rush brings hope and angst across Queensland as army of workers on the move
Click to expand...

I did read that article in todays courier mail. They mention people not being able to find anywhere to rent with houses being snapped up less then 45 minutes after becoming available. That doesn't seem to be a case as there seems to be plenty of stock at the moment.
 
Thanks Goondog,

I had a look at your site on Ann St when I was up there a couple of months ago. Very impressive, love the look of the finished product and your furnishings. What rental are you getting, it looks like you are renting fully furnished?

Interesting that the cost of the workers camps is so high, they must be making a killing at that rate. I had assumed that the camps would fill before the local rental market, but with those rates it should be the other way around.

I'd be happy at $500/room in my 4 bed, 3 bath, 2 living, furnished townhouses, compared with their $1316. Even allowing for a huge amount for food, electricity etc, they would cost less than half as much to house in our developments. $100k/year for a 4 bed and $75k/year for a 3 bed, 3 bath would be fantastic. Selling on a 10% yield at those rents would retain a very healthy profit! Do you see this as realistic in the next 2-3 years?
 
by end of jan the vacancy rate will be back to pretty much zero.

ideally avoid signing anyone on a lease until mid jan if possible
 
Hey mate

I'm a local in Gladstone and from what I understand realestate.com doesn't give a very good indication of whats happening up here. They don't seem to take properties off the net or they are advertised but not actually available yet. Once they hit the market they don't last long. Peolpe are living in tents on the river because they can't get accomodation. I am working on a major project and the word is that the bulk of fifo workers will start ramping up around march and these people will occupy the camps, but what about the familes? There are plenty of members of this mobile army that aren't going to leave their families behind for five years while they build LNG plants they will come to town get laha and rent whatever properties they can get their hands on. $1000-$1200p/w for a 4 b 2b 2c house seems to be a pretty common expectation at the moment though realestates will tell you alot less. They might have slowed for the holiday break but 2012 will be full steam ahead with 3 LNG plants, Wiggins Island, Yarwun 2 possibly 3, and a whole lot more on the way New power station, possible steel factory, shale oil refinery, nickel plant, infrastructure projects throughout the city, not to mention maintenance and upgrades to the existing industries in town. Things are looking good for property owners in Gladstone
 
About 3-4 months ago there were only a few 3 bedders $475 per week and under. Now there looks to be about 13-15 $450 and under....
 
Hello, My update... We settle on a 5x2x2 house next month, using a Buyers Agent for the first time. During October the letting agent thought the rental value was between $700 - 730. Now they are saying $650. Hmmm. I agree the market maybe slowing for the Christmas break and will get going again early next year.

With $80 billion of investment growth to come in the area there should be good growth to come. A recent REIQ report advises Gladstone has shown the most regional growth during the past 12 months.

Some more info here: http://tiny.cc/q2zve
I like the question.. will Gladstone match the gowth of South Hedland and Karratha in the Pilbara. Any thoughts?
 
Bigtone said:
it will be great but not that great,

only lease for 6 months first off and then u should get a nice increase after let
Click to expand...
Hi Bigtone, thanks for your reply I was thinking a 12 month lease, but with a 6 month rent review. Also I understand the property may have a higher rental value if we furnish it. What do you think ?

Thanls, Marti
 
Marti said:
Hi Bigtone, thanks for your reply I was thinking a 12 month lease, but with a 6 month rent review. Also I understand the property may have a higher rental value if we furnish it. What do you think ?

Thanls, Marti
Click to expand...

yes that could work with the 6 month review.

furnishing is not something i normally like but in this market it pays off big time so well worth it
 
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