Sun shines on landlords as rents rise and vacancies fall

[ToGetProperty]

While the selling market is cooling definitely, but rental market starts moving. See this article and it seems that the yield of investment properties is improving slowly since this year.

http://www.smh.com.au/articles/2003/11/16/1068917671448.html

When will the market be crashed?

 

[abcdiamond]

Compare this info, to the thread "oversupply of rentals in Brisbane??" and it begins to get confusing

Unless of course Sydney leads the way in rising rents, and Brisbane will follow ... ?

 

[Dos]

Have to agree totally with ABCD!! Didn't read over the weekend and now that I have "caught up" with threads this morning, it seemed that the clouds were gathering and the day was looking gloomy!!

A stark contrast to some of the threads posted in the past few days. I suppose it depends on where you have your IP's. Mine is in Runcorn (Bris Sth) and around that area, we could happily put the rent up and get a tennant. Our place is a 3 bedder on 803sq, renting at $220/wk. On the rental list at the RE several weekends ago, there were 3 bedders on 400sq in a nearby suburb for $275. In one of the other posts, Camp Hill area is mentioned as not getting the rents BUT that area is "HOT" to say the least in terms of purchase prices and rent prices.

Would that be your synopsis ABCD???

Dos

 

[MJK]

I invest heavily in the Brisbane CBD and my experience to date is that Queenslanders prefer free standing home to rent much more than units. I believe the vacancy rates are below 2% for houses although I cant produce the evidence off hand. If there is a rental glut looming in Brisbane I would suggest like Meld and Sydney it will be in the inner city apartment market.

MJK

 

[skater]

I have property in Campbelltown and Mt Druitt. The rents have increased by $20pw in Campbelltown and $10pw in Mt Druitt. This has been in the last six months.

 

[abcdiamond]

Dos,

I have been under the impression that rental vacancies are low in the Bayside area of Brisbane. I'm getting $240 for a 3 bd basic house on 700sm. I now feel that I could have got $260, but as the first agent quoted $220, I was pretty happy with $240. This was back in June.

Skater, I also have an IP in St Clair, just around the corner from Mt Druitt, so I am happy to hear the rents are able to go up in that area too.

I'd agree with MJK that it will be the apartments that will have the glut.

Thats my feelings anyway.

 

[skater]

ABCdiamond,

Sorry, my house is in Lethbridge Park and the rents have risen there (all of the ex-housing commission places), however my Brother & Sister-in-Law have a (very nice) property in St Clair and they haven't been able to increase their rent yet.

 

[suggo]

We have just recently (26th Oct) rented out a house at Salisbury for $210 (I think now it was on the low side) and we got over thirty calls for it. It didn't last the day out before we had people wanting to move in! This was $20 higher than the last people we had in. (they stayed 1.5 yrs). We also raised the rent on our house in Sunnybank by $10 and the tennents had a look around and decided they would stay (obviously again on the low side, which BTW I'm ok with as they are both making good returns)

 

[Lilith]

My mom is renting in CBD Brisbane, paying 315 for a fully-furnished one-bedder unit since she just moved there a few months ago and is taking her time to check out the neighborhoods.

I agree that house vacancy is quite low. She was checking out Spring Hill and Bulimba houses, the supply was quite tight. When she inquired with the current landlord about extending the contract for another 3-6 months, her landlord offered to lower to 290. She also looked at some unfurnished two-bedder units in Teneriffe and New Farm, the quotes seem to have dropped about 15-20/week as compared to three months ago. There are at least a thousand new units in innercity Brisbane coming online in 2004, so I think the unit situation will further deteriorate.

 

[abcdiamond]

Originally posted by skater
however my Brother & Sister-in-Law have a (very nice) property in St Clair and they haven't been able to increase their rent yet.

Thanks for the update on that Skater, not the best news , but I can't complain with what I am getting, and at least the tenant wants to renew.

I am however considering the economics of selling down there to reinvest up here in SE QLD. I just havent been able to decide yet.

 

[ToGetProperty]

Originally posted by abcdiamond
I am however considering the economics of selling down there to reinvest up here in SE QLD.

Where in SE QLD would you suggest?

 

[abcdiamond]

ToGetProperty

I like the area that I am in, Victoria Point.

It's a nice place to live - thats why I live here
It's near the water
It's got plenty of shopping facilities, and already being expanded
It's far enough out from Brisbane, but its only 30-45 minutes drive to the City (not counting rush hour, but i've never done that myself)
Its popular for tenants

and its not "too" expensive.

But thats my "personal" opinion, based on my limited knowledge of this part of the country. I am sure other areas will have better CG potential. But until I find them, i'll stick with what I know.

 

[Dos]

It might be a bit of a bizzare theory of mine but do you think that suburbs or areas "between" good investment areas end up "catching up" to these other areas. I am thinking of the Regents Park/Munruben area that could be classified as between Logan and Ipswich. There seems to have been a little less impact on this area in regards to prices (not as dramatic as $80k - $180k) and may catch up to these other areas??

Just a thought.........

Dos

 

[abcdiamond]

Dos

I think it comes down to what people feel is worth buying. If the area is pretty close, and affordable, but they cant afford the other areas anymore, then yes, I would think those areas will follow on.

I think its the same as Mt Druitt area, in W.Sydney. It used to be the cheapest, the place to avoid, but now its affordable, but gone up in price just the same.

 

[Dos]

ABCD,

At Viccy Point, I know that prices are fairly good compared to Sydney waterfront but as a Brisbanite, I had always thought that prices are fairly high, of course compared to other Brisbane prices. I suppose it is the long-term to think of though. Can't go any further east can you!!! Unless you buy an acre or 2 on Peel, McLeay or Lamb Island. Can you give me a scinario on Vic Point, maybe even your current sit? Value of Prop and current rent. What is your take on buying on the islands? Will it ever be REALLY desirable to live on a small island just off the Brisbane coast??

As a matter of interest for everyone else, I have done some research into Emerald in Central Qld and found some good opportunities there. It is currently the only regional centre across the central Qld belt that is growing in population. Infrastructure is good and there is more work in the pipeline. They are also finding that more and more people are travelling there for these services and deciding in the end to move there. From 2 RE's, they had 4 rental props on the books and around 6-8 people/couples/groups looking for rental houses each weekend for the last few weeks. I was about to purchase a 3 bedder on 800sq that was tennanted until April 04, paying $220/wk. Was on the market for $155000. Too slow though and when I rang back to ask how much deposit they wanted, SOLD...... Oh well!!!

Dos

 

[Jacque]

I find it difficult with this as there seems to be conflicting articles everywhere.
I was up inspecting my Balmoral house on the weekend in Brissy and the PM informed me that the market had a glut of units but houses were still popular. Have only raised the rent $10 since I bought in Feb 2002. Mind you, I'm not complaining as the cg has been worth the loss on yield

I had to drop the rental on my Gladesville unit, however, from $275 to $250 in April. Place was vacant for a few weeks but I managed to get a 12 mth lease so I'm ok with that.

I tend to trust the PM's and go with their advice, but it never hurts to look in the local papers just to keep yourself informed.

 

[Dos]

I think ABCD would agree with me when I say that there is an over supply of inner city units for rent and that it seems to be flowing onto "some" houses in areas close to the city. I think it was another thread that mentioned someone at Camp Hill (close to city as well) had to chop the price of rent for their IP. Balmoral is also close-ish and one of those areas that are in at the moment.

As for us investers on the fringes, Runcorn for me and Vic Point for ABCD, there is plenty of demand for rentals. IMHO some of the rent prices in these areas are still quite low and hence easy to find a tennant.

Dos

 

[Dos]

Agreed also that there are conflicting reports around the place. I suppose that if you do the research and you are happy with the figures then you should be ok in the current environment.

Dos

 

[abcdiamond]

Dos
My IP in Vic Pt, is a small 3bd with double carport. It rents for $240, and cost me $212k, in April, +$7 to do it up a bit. The PM quoted $220pw when I bought it, then $240-250pw when I put it on the market, end of July.

I went for $240 with the first tenant that looked at it.

3 Local REA's have said I could sell for about $280k now.

My PPOR, also up here, cost me $380 in January, and the value back in June was advised at $450k. I need to get another value soon, just for curiosity. But if I was to rent this out, I would only get about $350pw.

I am not keen on the islands myself, although Coochie has done very well in CG. My current tenants moved from the islands to be on the mainland for convenience of schools and work. That says something.

 

[BV]

back in August, a friend of mine had to drop his rent in Cherrybrook (Sydney) from $480/w to $420/w to get a tenant ($60/w drop in just a 6 months).

I can see him renegotiating the rent when the rental
vacancies improve in that area.

At about the same time, I also lost my tenats in I/P1 and used the opportunity to fix up the place a little. I lost a couple of weeks rent but I increased the rent by $20/w and it rented straight away. They also signed up for 12 months.

Bill