Rents Decrease!

[marg4000]

A year or so ago we had to drop the rent from $445 pw to $395 pw to snag a tenant on the Sunny Coast. Admittedly we had pushed the rent quite a bit above market rates as we were not keen on the previous tenants but the property became vacant at a time when there were a lot of vacancies in the suburb. The PM suggested dropping the rent $20 pw but we bit the bullet and decided to get someone in promptly.
Marg

 

[wylie]

We did the same about six months ago in Coorparoo for a house that we had been getting $440 per week. We dropped it to $430 because there just wasn't much interest. Tenant agreed to pay $440 if we put in a dishwasher. Cost us $600. It is not often we have had to drop rents, but I'd rather get $10 less per week to get a good tenant than get nothing a week.

Actually, the problem seemed to be that at $440 per week our house was in that limbo land... not quite "flash" enough compared to others of similar price (short of a second bathroom and full sized third bedroom) but way better than houses that would fetch $400 that were so shabby compared to ours.

 

[Sunfish]

I'm not the one trying to prove that we are always saying "rents/prices always go up" because I think it is something "we" are accused of here regularly but which usually is quoted by those ridiculing property investors.

I am stating facts, you are calling me a liar.

Not sure if we should take this further.

 

[wylie]

I am stating facts, you are calling me a liar.

Come on... I'm not doing anything of the sort. You state that we all say "prices ALWAYS go up". I am saying (and others agree) that this is not something that we say, but it is quoted here on SS by those who ridicule property investors for being naive. I'm not calling you a liar. I'm just saying "prove it".

Not sure if we should take this further.

You are a bit grumpy tonight .

 

[Sunfish]

You are a bit grumpy tonight .

I see no reason to cop crap. The simple fact is that I have been hit over the head with the "rents always rise" story every time I question the economics of residential property.* Without it ,the house of cards collapses during a prolonged period of zero capital gains. We have zero cap gains and zero rent rises: Why would you have neg geared property?

*Accept that as a fact or call me a liar.

Goodnight!

 

[wylie]

I see no reason to cop crap. The simple fact is that I have been hit over the head with the "rents always rise" story every time I question the economics of residential property.* Without it ,the house of cards collapses during a prolonged period of zero capital gains. We have zero cap gains and zero rent rises: Why would you have neg geared property?

*Accept that as a fact or call me a liar.

Goodnight!

I neither accept that as a fact NOR call you a liar. I simply say if you make a statement, be prepared to back it up with proof.

Goodnight!

P.S. I'm talking about the statements that we apparently always make, not about anything to do with negative gearing. They are separate issues.

 

[willair]

Forget the birthday guys. That's not why I posted.

Age is only a number,at least you are about to make the big 70,hope you enjoy the day with the family,now to make 80..

 

[Sunfish]

Age is only a number,at least you are about to make the big 70,hope you enjoy the day with the family,now to make 80..

Mate, I'm not sure I want to be here in ten years. The brain still works but the body is failing.

 

[Steve Fitz]

Rents are going up in Perth. I was told vacancy at the moment is less than 2%

 

[D.T.]

Rents are going up in Perth. I was told vacancy at the moment is less than 2%

It's quite visible around the place. People are queuing up at rental home opens. Most PM's are taking deposits from prospective tenants along with their application, which is refunded if you don't get selected. Quite a few tenants are offering more than advertised rate to secure a place to live.

Anecdotal evidence perhaps

 

[Sunfish]

Seriously Steve, haven't you heard "There is always a bull market somewhere"?

A few years ago Perth was trumpeted as the place to be. But that didn't last long as it has been a graveyard lately.

 

[Andrew_A]

Yes rents go down as well as up! Might just see that happening in Dysart soon. Last time it happened to me personally was during the removal of -ve gearing in Brisbane however! Having said that 2010-2011 has been lean for rents in some outer areas of Brisbane, places especially where there were a lot of new builds coming online.

Interesting link considering the subject being discussed.

http://propertyupdate.com.au/rising-rents-a-certainty/

 

[peastman]

Did a poll a while ago called "Property prices always go up?"

http://somersoft.com/forums/showthread.php?t=73496

Result
Yes 23.44%
No 76.56%
Several of the people who voted yes, then put in the qualifier of "over the long term" but admitted there could be short term drops.

I would imagine a similar result if the question was "Rent always goes up?"

So far this year most of my properties have had small rent increses or stayed the same. It's just another year really, steady as she goes.

 

[hobo-jo]

I agree with Sunfish in that it is often IMPLIED here that rents always increase.

e.g.

Comment: Negative gearing is going to be removed
Regular Somersofter: Oh that doesn't matter I will just increase rents

Comment: Interest rates are risisng
Regular Somersofter: Oh that doesn't matter I will just increase rents

Comment: They are talking about increasing land tax
Regular Somersofter: Oh that doesn't matter I will just increase rents


I doubt I would find a "rents always increase" comment from users here, but I could find countless of the above comments suggesting rents will increase in almost any situation. It may not be implicitly stated, but it doesn't need to be...

i feel removal of neg gearing would also force rents up in proportion to value - rental increases in such circumstances have just as much to do with emotional confidence as it does economics.

Should we raise rents already?

However, when the leases finish it is a different matter, and if rate rises mean that rents rise generally, then of course the new lease will more than likely be at an increased rent.

 

[Propertunity]

Rents ease in capitals yet tenant demand builds

Rents ease in capitals yet tenant demand builds
http://www.rebonline.com.au/breaking-news/4952-rents-ease-in-capitals-yet-tenant-demand-builds

Median weekly asking rents for houses remained unchanged in Sydney, Melbourne, Brisbane and Perth, and fell in Canberra (2.0 per cent) and Adelaide (0.6 per cent) in the quarter.

Yes, these are averages - and as always there is no one market.

“Flat or declining rental growth over the March quarter for both houses and units indicates decreased competition for rental accommodation, particularly from first homebuyers that have become active as housing affordability has improved,” APM’s senior economist Andrew Wilson said.

 

[devo76]

slightly different there.
Your references are about what people may do in the future. Hard to disprove something that hasn't happened yet.
What some posters here are talking about is quite simply.
Comments like " property always goes up" etc are normally not made by the somersoft investor. They are made by others against them instead.

I agree with Sunfish in that it is often IMPLIED here that rents always increase.

e.g.

Comment: Negative gearing is going to be removed
Regular Somersofter: Oh that doesn't matter I will just increase rents

Comment: Interest rates are risisng
Regular Somersofter: Oh that doesn't matter I will just increase rents

Comment: They are talking about increasing land tax
Regular Somersofter: Oh that doesn't matter I will just increase rents


I doubt I would find a "rents always increase" comment from users here, but I could find countless of the above comments suggesting rents will increase in almost any situation. It may not be implicitly stated, but it doesn't need to be...

 

[The Fence]

My rents have always gone up....period!

 

[Piston Broke]

I posted this, including the excalamation mark, as i was surprised at how much across the board I am seeing this, which is reductions over 10%.
Its been the 90s since i have seen this.

The common theme has always been that rent will increase as expenses and inflation increases.
My stance has always been nothing can increase if people dont have the money to pay for it.
The only thing keeping rent stable seems gov subsidies in many areas.
So you get crappy rent or crappy tenants.

Be nice. I'm 70 in a few days

No wonder your a wise young punk!
You have a great birthday.

 

[lizzie]

Comment: Negative gearing is going to be removed
Regular Somersofter: Oh that doesn't matter I will just increase rents

Thanks for quoting me albeit not in the manner my comment was intended (or was there something taken out of context?).

Never have I said rents always go up - I do believe that the short term effect of removing CG will mean less IP's to rent - hence demand/supply ratio shifts and rents have a good likelihood of rising. But that is just my opinion.

 

[wylie]

I would also add that over 30 years, with our own IPs plus my parents' IPs we have only ever had to reduce rents possibly half a dozen times.

Way more times we have left rents for a new tenant at the same rate, but more often than not, it was to get the place rented rather than try for more and have it empty a week longer than necessary.