Rental Shortage in CBD

[McBrain]

http://www.theage.com.au/news/natio...sion-impossible/2008/05/27/1211654031736.html

Quote: Carly said: "It's frustrating. We want to walk to work, we want to live in Melbourne and experience it. We are a young couple, no kids and just want to be able to go to the bars and cafes."

Boo Hoo! What's the World coming to where everyone who wants to can't walk to work and live next to their favorite bar!

 

[VYBerlinaV8]

This is why I invest in inner city areas (not just my serviced apartments), because there will always be rental demand from the 'I wants'...

 

[McBrain]

This is why I invest in inner city areas (not just my serviced apartments), because there will always be rental demand from the 'I wants'...

Me too

It wasn't long ago that there was a glut of CBD appartments and many were left vacant.

 

[Rob Williams]

Me too

And me. I believe that rising oil prices will have an impact, too.
All of my IP's are within 7km of the CBD, well serviced by public transport and will appeal to the "I Wants", empty nesters and a variety of others.

 

[DavidMc]

Until they have kids and get fired from their yuppie jobs when their employers realise in a recession that they're stupidly overpaid.
Alex

Shhh Alex! Keep it down...

 

[HiredGoon]

Thanks to Foundation: http://bubblepedia.net.au/tiki-view_blog.php?blogId=5

But here’s what they didn’t do. They didn’t bother to make even the most cursory examination of the claim that "People looking to secure a rental property in suburbs such as Carlton, Docklands, Southbank, Fitzroy and Richmond have little choice but to look further out from the CBD". They simply reprinted it as provided.

Now within hours of the press release, I ran a search for rental properties on each of these listed suburbs using the Realestate.com.au (presumably this is available to the reporters?). The results were striking:

Suburb (Rental Advertisements): Link

Docklands (122): http://www.realestate.com.au/cgi-bin/rsearch?id=docklands&a=qfp&cu=fn-rea&t=ren&q=Go

Southbank (144): http://www.realestate.com.au/cgi-bin/rsearch?id=southbank&a=qfp&cu=fn-rea&t=ren&q=Go

Carlton (85): http://www.realestate.com.au/cgi-bin/rsearch?o=def&t=ren&a=s&u=CARLTON&s=vic]

Fitzroy (49): http://www.realestate.com.au/cgi-bin/rsearch?o=def&t=ren&a=s&u=FITZROY&s=vic

Richmond (142): http://www.realestate.com.au/cgi-bin/rsearch?o=def&t=ren&a=s&u=FITZROY&s=vic

Dividing these figures by the number of rental dwellings counted in the 2006 Census provides us with the number of rental listings as a percentage of all rental dwellings:

Docklands: 122/1413 = 8.6%

Southbank: 144/2671 = 5.4%

Carlton: 85/4320 = 2.0%

Fitzroy: 49/2170 = 2.3%

Richmond: 142/5191 = 2.7%

Now to be sure, some of these are listed but not yet available. But the majority are available to rent now or within days. Check the links if you find this hard to believe. To be sure, some additional construction would have occurred since 2006 (but the REIV do not adjust for this either). But the claim that people will be unable to secure rental property in these areas due to the Inner City 0.3% vacancy rate just doesn’t stand the most basic test of scrutiny.

How hard would it be for The Herald-Sun? to check these facts?

Final thought: When will the real estate ‘institutes’ first begin publishing negative figures?

 

[Ausprop]

Thanks to Foundation: Final thought: When will the real e...ecast a 5% drop in median for Perth this year

 

[Smilla]

some people in this thread come across as very bitter!

 

[Dis]

Thanks to Foundation: http://bubblepedia.net.au/tiki-view_blog.php?blogId=5


Docklands: 122/1413 = 8.6%

Southbank: 144/2671 = 5.4%

Carlton: 85/4320 = 2.0%

Fitzroy: 49/2170 = 2.3%

Richmond: 142/5191 = 2.7%

............ When will the real estate ‘institutes’ first begin publishing negative figures?

Lets take an average of your highest (8.6%) and lowest (2.0%) = 5.3%

If you presume that properties are listed for an average of 2 weeks and have 2 days vacancy bewteen tenants , that would be a vacancy rate of:

(5.3 / 14) X 2 = 0.76 % vacancy

Edit: Quite a few say available now but that does not mean they are available. REAs leave ads up as long as possible to attract customers.

"I'm sorry sir, that one has gone but I have a great xxxx a few streets away."

 

[HiredGoon]

Nice rationalisation - I'm sure you have some kind of mental model that justifies Australia's current house prices too.

So what you're saying is ads stay up for 7 times longer than they are actually vacant? I doubt it.

Have you contacted anyone and seen if houses were actually not ready? Because a few people from GHPC did that a few times and they were. Apparently agents are really good at taking them down within 24 hours now of them being rented.

Remember that this is just 1 search engine, not every house is advertised through that website.

 

[xgjunkie]

Wow!

I thought this was supposed to be a forum devoted to property investing.

So how come all the animosity towards renters?

More than half the posts on this thread are clearly having fun at the expense of renters.

You should all be ashamed.

Don't forget who your number one customer is. All astute business people are aware of that assertion. it appears many here are simply not businessmen but rather wishful thinkers.

 

[boomtown]

Well said xgjunkie

 

[wylie]

I would say the only animosity towards renters is towards those renters who do the wrong thing.

I value my customers extremely highly. I have no animosity towards them unless then damage my property or decide they will not pay their rent.

I think you are just fishing.....

 

[HandyAndy888]

I think everyone is aware of my viewpoint when it comes to the "I am trying to punch above my weight because I live near the CBD" cohort....

If only I had a dollar for everytime someone thought, geez, if only I lived closer to the CBD...

 

[xgjunkie]

I would say the only animosity towards renters is towards those renters who do the wrong thing.

I value my customers extremely highly. I have no animosity towards them unless then damage my property or decide they will not pay their rent.

I think you are just fishing.....

No, not intended.

I do however agree completely with you regarding the behaviour of some renters. If they don't pay their rent, evict them, if they damage property, claim it on insurance and let the insurance company persue them through the courts and to the end of the earth.
Run the property like a business, you don't see the GM of woolies complaining that shoppers are damaging their property with trolleys and their dirty unwashed kids (pun) are dirtying up the place, it is a part of doing business, so what.

But,

I'm of the opinion that there may possibly be more landlords doing the wrong thing to renters than the other way around.
Sure everyone has horror stories but they are few and far between unless you are unlucky.

The MSM seems to take great delight in exposing bad renters and they are absolute shockers, but we are talking about <1%.

 

[HiredGoon]

Run the property like a business, you don't see the GM of woolies complaining

Yeah, but you don't see the GM of woolies selling things for less than it costs them and thinking someone will come along and buy their loss-making business for ever greater sums.

 

[Thrawn]

Yeah, but you don't see the GM of woolies selling things for less than it costs them and thinking someone will come along and buy their loss-making business for ever greater sums.

Given Woolies probably has a PE ratio of around 15, thats equal to a return of 6.5% on a cost of capital of around 8.5% at least. I'd say thats a loss making investment as well.

 

[Dis]

Nice rationalisation - I'm sure you have some kind of mental model that justifies Australia's current house prices too.

Yep! Australians are willing to spend way too much of their income on housing. Not my style personally. Not yours either.

So what you're saying is ads stay up for 7 times longer than they are actually vacant? I doubt it.

In most cases tenants must give 28 days notice (sometimes 14). Landlorsd must give 14-90 days notice. From memory you can only show new tenants around in the last 2 weeks of tenancy. So in practice a landlord is given notice and thare are a few days turn around until the add goes up (say 3 weeks before the tenant vacates). Then the add is run until inspections begin ( 2 weeks before vacancy), and until a new tenant is chosen. In a tight market there the lease will be signed quickly so the adds will not last long and vacanacy will be short. There will be properties which have longer vacancies but there will also be properties advertised well before they are available.

Have you contacted anyone and seen if houses were actually not ready?

No. I'm minimising my phone costs to pay for my massive negative gearing expenses!

 

[VYBerlinaV8]

Until they have kids and get fired from their yuppie jobs when their employers realise in a recession that they're stupidly overpaid.
Alex

Unless you live in a government town where the major employer is located mostly in the city, and rarely cleans house in terms of staffing.

Canberra doesn't seem to experience the same highs and lows of Syd/Mel/Bne, in the inner city at least.

 

[DavidMc]

Have you contacted anyone and seen if houses were actually not ready? Because a few people from GHPC did that a few times and they were. Apparently agents are really good at taking them down within 24 hours now of them being rented.

What your saying is almost the opposite of what my social circle are experiencing.

I've attached small sample conversation from Facebook...

Try telling my mate who lives in the apartment underneath me that there is no rental crisis. He's got many similar stories like this one to share... 30+ people during the inspection, low quality stock available at high prices, etc. He's been looking for weeks now.