This Blog is designed to provide information about buying or renting apartments in Brisbane, Australia.
Saturday, January 23, 2010
Rents in 2010
2009 weak year for rent growth
Still down in 2010
But will rise within months
RENTS across Australia stagnated and in some cases even fell in the December quarter, but are expected to rise later this year.
A report to be released by Australian Property Monitors today says last year was the weakest for national rental growth since 2002.
While APM flags a strong lift in rents is likely this year, property managers and landlords reported that the market had remained soft so far this month, which is typically the busiest month for the rental market.
Chris Rolls, managing director of the Gold Coast and Brisbane residential property manager Rental Express, said: "We have found this is the slowest start to the year for the last five years."
Mr Rolls, who owns a four-bedroom rental property in Brisbane suburb Kelvin Grove, said the contract for the property came up for renewal in 10 days and he had opted to keep the rent at $520 a week in the hope that the current tenants would not leave.
"The risk is that if you increase the rent, and they don't pay it and instead move out, I won't get the same rent. It was top rent 12 months ago," Mr Rolls said.
Harcourts New Farm owner and property manager Kylie Pridham agreed the tenant's reprieve - brought about by the global financial crisis - would not last long, with vacancy rates in Brisbane to remain about three per cent.
"We have had to reduce [the rent] on some properties by $50 a week, but that won't last," Ms Pridham told theAustralian Financial Review.
"As soon as the lease finishes in six months time those rents will be back up."
Interest in the sale may be strong but the general property outlook for the year is a little more sobering, according to property analyst Michael Matusik. Mr Matusik warned that property was likely to be oversupplied this year. He cited factors including a shrinking average household size, less impact than expected from overseas migration and lots of empty houses around the country.
Mr Matusik said that after decades of overconsuming property, the past year had seen a more frugal mindset which could continue.
And he said the rental market was not as tight as some commentators claimed. Rental analyst Louis Christopher of SQM research said claims of an imminent increase in rents were optimistic.
"There is no evidence to suggest we will see significant increases in rents," Mr Christopher said. "Despite recent aggressive forecasts, increases of between 3-5 per cent in most areas are more likely, depending on what you are renting and where," he said.
His calculations put Brisbane's vacancy rate at 3.4 per cent last month, with 8603 homes available for rent. This is up nearly half a per cent from the previous month.