The vacancy rate of inner city Brisbane property has increased to above 4%. This is regarded as being unhealthy for landlords. Rents are decreasing - and tenants are asking for rent reductions on renewals.
See http://www.beesnees.com.au/2018/02/brisbanes-rental-vacancy-rate-4/
Showing posts with label vacancy rate. Show all posts
Showing posts with label vacancy rate. Show all posts
Friday, February 2, 2018
Friday, September 9, 2016
Declining Apartment Market in Brisbane
The September HTW Month-in-Review report suggests that for Brisbane, it is time to selling apartments and buy houses. I have noticed that prices for apartments being resold are soft. An above average apartment that was sold off the plan in 2007 for $550,000 is lucky to sell today for $470,000.
See attached from HTW (click on image to enlarge)
See attached from HTW (click on image to enlarge)
Friday, June 3, 2016
HTW view on Brisbane apartment market
There has been a lot of talk about our inner city unit
market with an oversupply situation that’s graduated
from 'looming' to 'inevitable'. This sector is a huge
concern. There are still heaps of projects that are yet
to come online or are in the planning phase. They are
also predominantly investor driven and this could be
a recipe for a lot of heartache – particularly as a large
percentage of buyers are interstate and international
investors. Add to this the tighter restrictions on
lending to foreign investors and you can see where it might all be heading. As we’ve been saying for
some time – in terms of inner city units, the best per
formers are, and will continue to be, those projects
designed with owner-occupiers in mind.
If you’re wondering how tenant demand is tracking, we can con rm current data shows vacancy rates for houses at 2.5% and units at 3.2% (unit vacancy increased by 0.3% year-on-year). The combined vacancy rate for all property types is 2.7%. The general rule is any result below 2% demonstrates an under supply of rentals, 2% to 3% seems balance, and over 3% represents oversupply. From the numbers above, it’s easy to recognise where the weak sector is in the market.
See June Month in Review
If you’re wondering how tenant demand is tracking, we can con rm current data shows vacancy rates for houses at 2.5% and units at 3.2% (unit vacancy increased by 0.3% year-on-year). The combined vacancy rate for all property types is 2.7%. The general rule is any result below 2% demonstrates an under supply of rentals, 2% to 3% seems balance, and over 3% represents oversupply. From the numbers above, it’s easy to recognise where the weak sector is in the market.
See June Month in Review
Monday, February 8, 2016
Brisbane Vacancy Rate Increases
According to the REIQ, the rental vacancy rate in the inner city of Brisbane is almost double that of the middle ring:
The REIQ Rental Report has revealed a higher vacancy rate in inner Brisbane as the supply of new apartments edges the
0-5km ring into weak territory for the December quarter.
The inner Brisbane vacancy rate reached 3.8%, up
from 3.4% in the September quarter.
In contrast, the more affordable middle ring of
5-20kms tightened as the more affordable dwellings attracted residents, going
from 2.4% to 2.1%.
Sunday, January 10, 2016
Response to Reader Comment regarding quality Brisbane apartments
A reader recently posted this comment, in relation to my post below:
"... you are certainly correct that there is a lot of stock under construction that will settle through the end of this year and next. However, with few exceptions most of this is small 1bd and 2bd "investor" stock targeted at the rental market. As you said, this is already leading to increases in vacancy rates and lower rents - at present, this is probably just a return to normal but it will probably over-correct and the rents/vacancy for small 1bd and 2bd stock will be worse than long term trend levels. That said, why do you see this impacting on quality owner occupier buildings such as admiralty, quay west?? The investor stock being constructed at present is vastly different to the owner occupier stock and I doubt there are many occupiers out there tossing up between admiralty and meriton's soleil. I feel the two markets will diverge and the the limited amount of quality owner occupier stock will lead to growth in this market. Do you not agree?"
This is my response. The over-supply in Brisbane is having an impact on the rental market for the high quality, owner occupied buildings. Note that many these buildings still have more than 40% of the apartments rented out, usually to long term tenants. For example, in Admiralty Towers, large three bedroom apartments that rented for about $1,400 a week at the top of the rental market boom are now renting for less than $1,000 a week. An excellent large one bedroom apartment with river views, fully furnished, has been vacant for months, at an asking rent of less than $600 a week. This apartment would have rented quickly at about $640 a week two years ago. For some reason, some tenants prefer smaller apartments in newer buildings.
The rental market in quality buildings is being impacted by a number of factors, and not just new apartments being completed. These factors include:
"... you are certainly correct that there is a lot of stock under construction that will settle through the end of this year and next. However, with few exceptions most of this is small 1bd and 2bd "investor" stock targeted at the rental market. As you said, this is already leading to increases in vacancy rates and lower rents - at present, this is probably just a return to normal but it will probably over-correct and the rents/vacancy for small 1bd and 2bd stock will be worse than long term trend levels. That said, why do you see this impacting on quality owner occupier buildings such as admiralty, quay west?? The investor stock being constructed at present is vastly different to the owner occupier stock and I doubt there are many occupiers out there tossing up between admiralty and meriton's soleil. I feel the two markets will diverge and the the limited amount of quality owner occupier stock will lead to growth in this market. Do you not agree?"
This is my response. The over-supply in Brisbane is having an impact on the rental market for the high quality, owner occupied buildings. Note that many these buildings still have more than 40% of the apartments rented out, usually to long term tenants. For example, in Admiralty Towers, large three bedroom apartments that rented for about $1,400 a week at the top of the rental market boom are now renting for less than $1,000 a week. An excellent large one bedroom apartment with river views, fully furnished, has been vacant for months, at an asking rent of less than $600 a week. This apartment would have rented quickly at about $640 a week two years ago. For some reason, some tenants prefer smaller apartments in newer buildings.
The rental market in quality buildings is being impacted by a number of factors, and not just new apartments being completed. These factors include:
- the end of the mining boom, so less executive rentals
- a rental boom, that probably caused rents to increase too much
- short term rental apartments not achieving good returns, and so these are re-entering the long term rental market
- lower population growth
- no income growth
- younger people having different views as to what is a trendy apartment
- more choice in more inner city locations
Prices seem to be holding up at present, partly because interest rates are so low. I recently locked in an investor loan fixed for 3 years at 4.09%. Even at a reduced rent, this property is cash flow positive today. So why sell?
I agree that owner-occupiers still have little choice for quality apartments in Brisbane. If you are looking for a large two or three bedroom apartment in a quality building in a good location, there is still not much choice. Very few of the new buildings would be suitable if you are looking for a long term residence.
Sunday, May 31, 2015
Leave Your Money in the Bank
"The latest research shows that only 10% of sales in the Brisbane inner-city unit market are to owner-occupiers. Investors are buying 90% of the stock and the great majority of them are distant investors – people from interstate and overseas. Many will wish they had left their money in the bank.
Vacancies in Brisbane’s inner-city suburbs range from 4% or 6.5% - and that’s before all the new supply now under construction hits the rental market. BIS Shrapnel research shows that a record number of new apartments will be completed this year, but more will be finished next year and even more the year after. These numbers are a red flag for sensible buyers.
Brisbane, like Melbourne and the Gold Coast, is building far too many apartments because they’re not being created for local consumption – they’re being conceived for sale to unsuspecting foreign buyers."
See Terry Ryder: Better in the bank than on Brisbane inner-city apartments
Tuesday, November 4, 2014
Valuer's view of Brisbane property
"Firstly, interstate migration is a long way off its heady
peaks in 2003. It’s flat performance isn’t a total deal
breaker for our state’s rising market, but certainly if these numbers were to pick up, you’d think good
things are set to follow.
Recent sales evidence would indicate there has been a levelling of prices and values over the past quarter. There’s a little more urgency amongst buyers, which has led to growth in the 12 months to June 2014. Values are up around 10% for near-city detached housing, and entry level housing within 5 kilometres of the CBD remains a market that is outperforming other sectors.
We do seem to be entering a phase of upgrading – although this is taking form in increased sale numbers, and consequently values, for vacant land and renovating existing dwellings, not to mention the downsizers (but not downgraders) into the prestige unit market. The stagnation in the market during the 2010 to mid-2013 stalled the upgrader market – due mainly to them being unable to offload their existing residence before shooting for something a bit better.
Like the stone that drops in the pond, the ripple affect is real for Brisbane’s property market. Starting with inner/near city detached housing and extending from there, how far the wave travels is dependent upon the strength of the boom.
The only standout in the supply and demand equation remains the unit market. With a significant increase in supply on the way, coupled with low interstate migration along with existing tenants taking the opportunity to buy or enter the market, we believe this sector has potential for a rising vacancy rate in the short term."
Source: HTW November 2014 Month in Review
Recent sales evidence would indicate there has been a levelling of prices and values over the past quarter. There’s a little more urgency amongst buyers, which has led to growth in the 12 months to June 2014. Values are up around 10% for near-city detached housing, and entry level housing within 5 kilometres of the CBD remains a market that is outperforming other sectors.
We do seem to be entering a phase of upgrading – although this is taking form in increased sale numbers, and consequently values, for vacant land and renovating existing dwellings, not to mention the downsizers (but not downgraders) into the prestige unit market. The stagnation in the market during the 2010 to mid-2013 stalled the upgrader market – due mainly to them being unable to offload their existing residence before shooting for something a bit better.
Like the stone that drops in the pond, the ripple affect is real for Brisbane’s property market. Starting with inner/near city detached housing and extending from there, how far the wave travels is dependent upon the strength of the boom.
The only standout in the supply and demand equation remains the unit market. With a significant increase in supply on the way, coupled with low interstate migration along with existing tenants taking the opportunity to buy or enter the market, we believe this sector has potential for a rising vacancy rate in the short term."
Source: HTW November 2014 Month in Review
Friday, October 31, 2014
Brisbane rental market
From an REIQ press release that was issued today:
Rental markets remain tight in southeast Queensland and the state’s major tourism centres according to the latest REIQ Residential Rental Survey, conducted at the end of September.
REIQ CEO Antonia Mercorella said the survey showed vacancy rates remained relatively steady across most parts of the state, with improvements in some key regional markets. Ms Mercorella said only four of the 16 major regions in Queensland recorded a significant change in vacancy rates, with something of a two-tier affect still evident in the State’s rental market.
Ms Mercorella said at the end of September, the Brisbane City local government area (LGA) recorded a vacancy rate of 2.3 per cent, relatively unchanged since the end of June.
“Brisbane’s middle to outer suburbs – those 5-to-20km from the CBD - recorded a slight easing in vacancy levels, up 0.2 percentage points to two per cent at the end of September. The city’s inner suburbs, on the other hand, recorded a vacancy level of 2.9 per cent, down from 3.4 per cent at the end of June. Median weekly rents from the Residential Tenancy Authority (RTA) for the September quarter show relatively steady rents across the Brisbane City LGA.”
Ms Mercorella said Queensland’s tourism centres continued to record tight rental conditions.
“On the Sunshine Coast, the vacancy rate is at one per cent, the lowest of any major region in the state,” she said. “Population growth and a lack of investor activity are contributing to these tight conditions, particularly in hinterland areas where agents are struggling to find enough rental properties to meet demand.
Saturday, August 30, 2014
High-rise Brisbane
A newspaper article by Matusik in the Courier Mail today reflected on potential changes to the Brisbane inner city apartment market:
"Brisbane is set for an increase in the supply of new inner-city digs. Brisbane could well face an oversupply of downtown apartment stock. And that increase in stock might more resemble a tsunami in terms of its impart on the market and potential investment outcomes.
For the past five years, the Brisbane market has been undersupplied, with an underlying demand of about 9000 new dwellings across Brisbane. However, when we break down future demand by market segment, going rental demand (those who occupy a significant percentage of inner-city apartments) appears likely to fall. And Brisbane's future demand will more likely be deriven by the increasing downs and retirement markets. Those folk are, for the main, not enticed by large, high-rise complexes.
Rents are down, the vacancy rate is increasing and some resales in recently completed inner-city apartment buildings are already selling for losses.
Currently, the vacancy rate in Brisbane city is 4.2%. Two years ago it was 1.2%.
And there are now 276 properties (as at June) for rent in Brisbane/Spring Hill, compared with just 48 two years ago. For the first time in five years, rents have fallen."
"Brisbane is set for an increase in the supply of new inner-city digs. Brisbane could well face an oversupply of downtown apartment stock. And that increase in stock might more resemble a tsunami in terms of its impart on the market and potential investment outcomes.
For the past five years, the Brisbane market has been undersupplied, with an underlying demand of about 9000 new dwellings across Brisbane. However, when we break down future demand by market segment, going rental demand (those who occupy a significant percentage of inner-city apartments) appears likely to fall. And Brisbane's future demand will more likely be deriven by the increasing downs and retirement markets. Those folk are, for the main, not enticed by large, high-rise complexes.
Rents are down, the vacancy rate is increasing and some resales in recently completed inner-city apartment buildings are already selling for losses.
Currently, the vacancy rate in Brisbane city is 4.2%. Two years ago it was 1.2%.
And there are now 276 properties (as at June) for rent in Brisbane/Spring Hill, compared with just 48 two years ago. For the first time in five years, rents have fallen."
Sunday, May 4, 2014
Two Tier Property Market in Brisbane?
Is there are two tier market in Brisbane for apartments? Are Brisbane owners, investors and renters looking for one kind of apartment, but developers are building another kind of apartment for foreign investors? Some commentators have said that there will be an oversupply of apartments in Brisbane. For a certain kind of apartment, that may be correct. But for what Brisbanites want, there may be an undersupply.
Take Bowen Hills for example. It is close to the city, but has very few local amenities. It was a light industrial area, and with highways cutting through it. It is not inner city, and too far to walk to downtown or the Valley. There are no parks or restaurants or river views. There are number of large apartment buildings being constructed in that area, with small one and two bed apartments. A lot of the sales and marketing is targeted at foreign investors, particularly the Chinese. But do locals want to live in these apartments? They are very small, and the buildings are very dense. There are very few owner occupiers in these buildings.
Some examples are Madison Heights (286 apartments) and Chelsea (195 apartments). It appears that it is taking a long time to rent out or re-rent the apartments in these buildings. Rents are being reduced, for example, to $485 for a two bedroom apartment. I suspect that the rental market is saying that, for the location and facilities, you can do much better elsewhere, so the apartments are renting only if rents are very competitive.
On the other hand, river front apartments in Brisbane city, apartments in New Farm, and "normal" residential locations such as Indooroopilly (where very few new apartments have been added to the market in the past five years), appear to be selling well and renting quickly. These apartments are often much larger (130 sqm compared to 75 sqm for a 2 bedroom apartment, for example), have a better location, have more owner occupiers, and there is not an oversupply.
I also wonder what rents and returns the investors in the new apartment buildings have been promised, and what they are actually receiving, and for how long the apartment sits empty not generating rent?
Will the rents hold up when it comes renewal time in six months or a year? Will tenants stay on or move out? The Chelsea is an example of a building that appears to have a number of apartments for rent; it completed in 2012, and received bad press at the time. (An advertisement below from last year for Urban Edge at Kelvin Grove, settled last year, where apartments will be coming up for renewal about now. Kelvin Grove is a much better location than Bowen Hills in my view.)
Take Bowen Hills for example. It is close to the city, but has very few local amenities. It was a light industrial area, and with highways cutting through it. It is not inner city, and too far to walk to downtown or the Valley. There are no parks or restaurants or river views. There are number of large apartment buildings being constructed in that area, with small one and two bed apartments. A lot of the sales and marketing is targeted at foreign investors, particularly the Chinese. But do locals want to live in these apartments? They are very small, and the buildings are very dense. There are very few owner occupiers in these buildings.
Some examples are Madison Heights (286 apartments) and Chelsea (195 apartments). It appears that it is taking a long time to rent out or re-rent the apartments in these buildings. Rents are being reduced, for example, to $485 for a two bedroom apartment. I suspect that the rental market is saying that, for the location and facilities, you can do much better elsewhere, so the apartments are renting only if rents are very competitive.
On the other hand, river front apartments in Brisbane city, apartments in New Farm, and "normal" residential locations such as Indooroopilly (where very few new apartments have been added to the market in the past five years), appear to be selling well and renting quickly. These apartments are often much larger (130 sqm compared to 75 sqm for a 2 bedroom apartment, for example), have a better location, have more owner occupiers, and there is not an oversupply.
I also wonder what rents and returns the investors in the new apartment buildings have been promised, and what they are actually receiving, and for how long the apartment sits empty not generating rent?
Will the rents hold up when it comes renewal time in six months or a year? Will tenants stay on or move out? The Chelsea is an example of a building that appears to have a number of apartments for rent; it completed in 2012, and received bad press at the time. (An advertisement below from last year for Urban Edge at Kelvin Grove, settled last year, where apartments will be coming up for renewal about now. Kelvin Grove is a much better location than Bowen Hills in my view.)
Monday, April 21, 2014
Vacancy Rate and Rents Fall in Brisbane
Recent Press Release from REIQ:
The majority of Queensland’s rental markets have returned to tighter conditions, according to the REIQ’s latest Residential Rental Survey.
REIQ CEO Anton Kardash said the survey, carried out in March across all REIQ accredited agencies, found that the majority of the state recorded lower vacancy rates compared to three months ago.
“Queensland is seeing a return to a tighter rental market,” he said. “Stronger tenant demand and a decrease in the availability of stock are the common themes across the State.”
In Brisbane, the overall vacancy rate for the metropolitan area was back down to 2.3 per cent, as seen at the end of September last year. Excluding the spike recorded in December, the Brisbane vacancy rate has been around the 2 to 2.3 per cent mark for over 12 months now. As expected, the Brisbane inner city rental market returned to a healthier vacancy rate following a spike in December. This is reportedly the result of easing asking rents to ensure vacancies are refilled quickly and also to compete with the new stock on the market. ...
Despite increased investor activity across Queensland in recent months, local agents report an increased number of sales of former investment properties to owner-occupiers, reducing the overall rental pool in some areas.
The majority of Queensland’s rental markets have returned to tighter conditions, according to the REIQ’s latest Residential Rental Survey.
REIQ CEO Anton Kardash said the survey, carried out in March across all REIQ accredited agencies, found that the majority of the state recorded lower vacancy rates compared to three months ago.
“Queensland is seeing a return to a tighter rental market,” he said. “Stronger tenant demand and a decrease in the availability of stock are the common themes across the State.”
In Brisbane, the overall vacancy rate for the metropolitan area was back down to 2.3 per cent, as seen at the end of September last year. Excluding the spike recorded in December, the Brisbane vacancy rate has been around the 2 to 2.3 per cent mark for over 12 months now. As expected, the Brisbane inner city rental market returned to a healthier vacancy rate following a spike in December. This is reportedly the result of easing asking rents to ensure vacancies are refilled quickly and also to compete with the new stock on the market. ...
Despite increased investor activity across Queensland in recent months, local agents report an increased number of sales of former investment properties to owner-occupiers, reducing the overall rental pool in some areas.
Wednesday, February 5, 2014
Executive Rentals Drying Up in Brisbane?
From Bees Nees:
Worryingly, the general consensus was that the executive rental market has been hit by the slow down in the mining boom and the completion of many plants that employed large numbers of workers. The feedback we got is that there may be a gap in the market between construction tailing off and the take up of skilled workers to run these plants. How long the gap will be is hard to quantify.
Two prominent executive relocation companies have said this was the quietest January they can recall in a long time. Based on this information our client has now decided to offer the property with an unfurnished option in the hope of boosting local enquiry. Watch this space in the coming months to see if executives rents are affected by this slow down.
Friday, January 31, 2014
Vacancy Rate Increases for inner Brisbane
As the Queensland sales market kicks into gear, pressure on the rental market has eased according
to the Real Estate Institute of Queensland (REIQ).
The REIQ Residential Rental Survey, carried out in December across all REIQ accredited agencies, found the majority of the State recording higher vacancy rates compared to the previous three months. REIQ chairman Rob Honeycombe said that it was usual for one market to thrive more than the other.
“Over the past few years, it has been the rental sector which has been the better-performing segment of the market,” he said. “Now while the sales market returns to healthy levels of activity after a period of subdued volumes, the rental market is experiencing a slight easing of vacancy rates after a long period of tight rental conditions. The rental market is also cyclical with January and February being the peak periods for demand. While rental markets within the mining regions are struggling with both supply and demand imbalances, the outlook for the rest of the Queensland rental market remains positive as business returns to normal now the Christmas holidays have passed.”
According to the survey data, over one third of REIQ member agencies reported an increase in investor activity which subsequently added stock to the rental pool. In addition to this, the end of the year is historically a period of lower tenant demand with many vacating over the Christmas and New Year periods, usually in a move to another area for either work or educational reasons. Over recent weeks, however, there has been an increase in enquiry and demand from tenants as is usual for January.
In the Brisbane City local government area, the vacancy rate as at the end of December was 3.2 per cent, up from 2.3 per cent at the end of September. A vacancy rate of around 3 per cent however is deemed to represent healthy levels of supply and demand.
Across Brisbane the results are varied. Inner Brisbane - suburbs within 5km of the CBD - recorded the highest increase, up 1.7 percentage points to 4.1 per cent.
“Local agents have reported a slight oversupply of rental properties with a number of new developments coming onto the market,” Mr Honeycombe said. “Also at the end of the year we generally experience lower tenant demand as residents vacate for work transfers or the end of the university year. From mid-January, demand increases again as tenants begin their search for their new property.”
The REIQ Residential Rental Survey, carried out in December across all REIQ accredited agencies, found the majority of the State recording higher vacancy rates compared to the previous three months. REIQ chairman Rob Honeycombe said that it was usual for one market to thrive more than the other.
“Over the past few years, it has been the rental sector which has been the better-performing segment of the market,” he said. “Now while the sales market returns to healthy levels of activity after a period of subdued volumes, the rental market is experiencing a slight easing of vacancy rates after a long period of tight rental conditions. The rental market is also cyclical with January and February being the peak periods for demand. While rental markets within the mining regions are struggling with both supply and demand imbalances, the outlook for the rest of the Queensland rental market remains positive as business returns to normal now the Christmas holidays have passed.”
According to the survey data, over one third of REIQ member agencies reported an increase in investor activity which subsequently added stock to the rental pool. In addition to this, the end of the year is historically a period of lower tenant demand with many vacating over the Christmas and New Year periods, usually in a move to another area for either work or educational reasons. Over recent weeks, however, there has been an increase in enquiry and demand from tenants as is usual for January.
In the Brisbane City local government area, the vacancy rate as at the end of December was 3.2 per cent, up from 2.3 per cent at the end of September. A vacancy rate of around 3 per cent however is deemed to represent healthy levels of supply and demand.
Across Brisbane the results are varied. Inner Brisbane - suburbs within 5km of the CBD - recorded the highest increase, up 1.7 percentage points to 4.1 per cent.
“Local agents have reported a slight oversupply of rental properties with a number of new developments coming onto the market,” Mr Honeycombe said. “Also at the end of the year we generally experience lower tenant demand as residents vacate for work transfers or the end of the university year. From mid-January, demand increases again as tenants begin their search for their new property.”
Monday, August 26, 2013
Rents and Vacancies
A number of onsite managers have reported to me that they are taking much longer than expected to fill vacancies, and that rents are going down, even when a tenant renews.
Saturday, April 27, 2013
USA real estate - note from a reader
This is a note that I received from a regular reader of this blog:
I’m currently visiting USA again for another 3 months. (You’ll recall my visit to USA and subsequent visit to China last year). I like to try and get a feel of the real estate market and the economy in the U.S. since Australia appears (at least to me) to follow the U.S by about 18-24 months. Things are considerably worse here on the ground, than last year, in my opinion. Looking at housing and units, empty units are everywhere in every town city, state, just everywhere. I researched this and read here that according to the U.S. Goverment, there are now 18.7 million units vacant in the U.S. Ref: http://www.thefiscaltimes.com/Articles/2011/08/04/9-Worst-Recession-Ghost-Towns-in-America.aspx#page1
I’m currently visiting USA again for another 3 months. (You’ll recall my visit to USA and subsequent visit to China last year). I like to try and get a feel of the real estate market and the economy in the U.S. since Australia appears (at least to me) to follow the U.S by about 18-24 months. Things are considerably worse here on the ground, than last year, in my opinion. Looking at housing and units, empty units are everywhere in every town city, state, just everywhere. I researched this and read here that according to the U.S. Goverment, there are now 18.7 million units vacant in the U.S. Ref: http://www.thefiscaltimes.com/Articles/2011/08/04/9-Worst-Recession-Ghost-Towns-in-America.aspx#page1
Talking with estate agents (if they’ll engage in a conversation - most are in denial) affordability seem to be the lead problem; people cannot afford or will not commit to buy, and people cannot afford to rent at any price. Mortgage rates here are 3.25-3.75% for a 30 year fixed mortgage!. Their parents are telling them not to commit to a mortgage since they themselves now owe more than they paid for their own property and have subsequently become the “near-retirement working poor”. Some apartment managers (if that’s what they are) are advertsing $500 in cash to sign-up to a lease. Last time I mentioned large numbers of shopping centres and motels were empty and closed up. This time round it’s more motels, an abundance of empty apartments and, restaurants. Restaurants is new for this visit, they have been hit badly, every town/ city along the way has scores of empty closed down restaurants. These were the mid-range market restaurants that offered good meals in the $15-$30 range. They’re closed. For example, where I stayed a few minutes from the Old Downtown Scaramento area, five in the street were shut along with 3 motels. I got talking with the manager of the Motel6 I stayed at which had 7 cars in the carpark on a Saturday night for a complex of 56 rooms. On asking him the question about the restaurants, he simply stated “No one will spend any money now, even if they’ve got it. They’re all spooked and shell-shocked by the GFC. I don’t know when this will end, if it does.” he said.
I wonder if what’s occurred here will find it’s way to Australia.
Friday, October 19, 2012
Low Vacancy Rate in Brisbane
Residential rental vacancy rates have remained tight across Queensland, according to the latest REIQ data. Findings from the Institute’s September Residential Rental Vacancy Rate Survey, compiled from
information and data by REIQ accredited real estate agencies, showed most major regions posting
vacancy rates of 2.5 per cent or less in September.
According to REIQ, a vacancy rate of three per cent is considered to be the equilibrium point of supply and demand.
REIQ CEO Anton Kardash said vacancy rates were continuing to trend into undersupply territory as investor activity slowly swings back into life.
"The rental market across Queensland has been constricted for more than two years now,’’ Mr Kardash said. "The reasons for this have been the low numbers of investors in the marketplace as well as the generally slow property sales market over the period. With the reduction in the numbers of properties being added to the rental pool, we are seeing more demand for a much smaller supply of properties."
The survey found the vacancy rate for Brisbane at the end of September was 1.7 per cent - down from 2.1 per cent three months before. Inner Brisbane’s vacancy rate was 1.5 per cent – down from 1.6 per cent. Property managers from REIQ accredited agencies said that market activity was slower over the period as was the case historically. Interest was also highest for new properties.
According to REIQ, a vacancy rate of three per cent is considered to be the equilibrium point of supply and demand.
REIQ CEO Anton Kardash said vacancy rates were continuing to trend into undersupply territory as investor activity slowly swings back into life.
"The rental market across Queensland has been constricted for more than two years now,’’ Mr Kardash said. "The reasons for this have been the low numbers of investors in the marketplace as well as the generally slow property sales market over the period. With the reduction in the numbers of properties being added to the rental pool, we are seeing more demand for a much smaller supply of properties."
The survey found the vacancy rate for Brisbane at the end of September was 1.7 per cent - down from 2.1 per cent three months before. Inner Brisbane’s vacancy rate was 1.5 per cent – down from 1.6 per cent. Property managers from REIQ accredited agencies said that market activity was slower over the period as was the case historically. Interest was also highest for new properties.
Sunday, July 22, 2012
REIQ: "Rental demand remains strong"
Extracts from an REIQ Press Release from Friday 20 July 2012:
The Queensland rental market remained constricted at the midway point of 2012, according to the latest Real Estate Institute of Queensland’s residential rental vacancy rate survey. The REIQ June vacancy rates - compiled from surveying property managers from REIQ accredited agencies across Queensland - shows demand for rental properties is still exceeding supply in many parts of the State. As at the end of June, rental vacancy rates in many areas remained below 3 per cent, which is considered the equilibrium point of rental supply and demand.
“The first three months of the year are generally the busiest in the Queensland rental cycle so we often see vacancy rates particularly low during this period of time,” REIQ CEO Anton Kardash said. “What our latest survey shows us is that demand for rental property remained strong at the end of June with vacancy rates generally remaining tight. While we are seeing an increase in the number of first home buyers and investors in the sales market, their activity will take some time to flow through to the rental market, which should ease some of this pressure on supply and rents we are now experiencing.”
In Brisbane, the vacancy rate at the end of June was 2.1 per cent, a slight improvement on 1.7 per cent in
March. Inner Brisbane recorded a vacancy rate of 1.6 per cent in June, with property managers from
REIQ accredited agencies reporting some rent increases taking place, especially for houses, due to
stronger demand.
The Queensland rental market remained constricted at the midway point of 2012, according to the latest Real Estate Institute of Queensland’s residential rental vacancy rate survey. The REIQ June vacancy rates - compiled from surveying property managers from REIQ accredited agencies across Queensland - shows demand for rental properties is still exceeding supply in many parts of the State. As at the end of June, rental vacancy rates in many areas remained below 3 per cent, which is considered the equilibrium point of rental supply and demand.
“The first three months of the year are generally the busiest in the Queensland rental cycle so we often see vacancy rates particularly low during this period of time,” REIQ CEO Anton Kardash said. “What our latest survey shows us is that demand for rental property remained strong at the end of June with vacancy rates generally remaining tight. While we are seeing an increase in the number of first home buyers and investors in the sales market, their activity will take some time to flow through to the rental market, which should ease some of this pressure on supply and rents we are now experiencing.”
Friday, July 13, 2012
The most significant barrier to a housing market recovery
"The most significant barrier to a housing market recovery: 301,414 homes for sale.
The number of homes available for sale across Australia has been decreasing; however stock levels remain well above average. Over the four weeks to 8 July 2012 RP Data tracked 301,414 unique properties advertised for sale across the country. While the number of homes available for sale is very high, the volume has been reducing and is actually about -7.4% lower than when supply levels peaked last November. ... Clearly, the large number of homes available for sale is due to a lack of absorption rather than a large number of new listings being added to the market."
See Property Pulse.
There are also a large number of properties that owners want to sell, but cannot, so they have been withdrawn from the sale process and rented out, with the hope that the market improves.
The number of homes available for sale across Australia has been decreasing; however stock levels remain well above average. Over the four weeks to 8 July 2012 RP Data tracked 301,414 unique properties advertised for sale across the country. While the number of homes available for sale is very high, the volume has been reducing and is actually about -7.4% lower than when supply levels peaked last November. ... Clearly, the large number of homes available for sale is due to a lack of absorption rather than a large number of new listings being added to the market."
See Property Pulse.
There are also a large number of properties that owners want to sell, but cannot, so they have been withdrawn from the sale process and rented out, with the hope that the market improves.
Monday, April 30, 2012
Rental Demand in Brisbane
Demand for rental properties continues to strengthen with vacancy rates tightening across the State, according to the Real Estate Institute of Queensland (REIQ).
The REIQ March residential vacancy rates, released today, show the majority of regions experiencing strong demand from tenants with vacancy rates in many areas now below 3 per cent. A vacancy rate of 3 per cent is generally considered to be the equilibrium point of supply and demand. REIQ CEO Anton Kardash said the tightening rental market was a result of the slower sales market over the past 12 months in particular.
In Brisbane, the vacancy rate has reduced to 1.7 per cent, from 2.3 per cent in December last year. Brisbane’s inner-city recorded a vacancy rate of 1.4 per cent, down from 1.9 per cent in December. Agents from REIQ inner Brisbane accredited agencies report supply levels remaining limited as tenants stay put, students are settled for the year, and potential first home buyers still opt for a wait-and-see approach. Investment properties currently up for sale are largely being bought by owner-occupiers which is also contributing to less rental stock overall.
Source: REIQ Press Release
I have been monitoring availability of unfurnished two bedroom apartments in the Brisbane downtown area. Let me say that there are not many of such apartments available for rent.
In Brisbane, the vacancy rate has reduced to 1.7 per cent, from 2.3 per cent in December last year. Brisbane’s inner-city recorded a vacancy rate of 1.4 per cent, down from 1.9 per cent in December. Agents from REIQ inner Brisbane accredited agencies report supply levels remaining limited as tenants stay put, students are settled for the year, and potential first home buyers still opt for a wait-and-see approach. Investment properties currently up for sale are largely being bought by owner-occupiers which is also contributing to less rental stock overall.
Source: REIQ Press Release
I have been monitoring availability of unfurnished two bedroom apartments in the Brisbane downtown area. Let me say that there are not many of such apartments available for rent.
Monday, January 30, 2012
Brisbane Rentals
According to SQM Research, the Brisbane rental market is tightening, with less advertised vacancies than this time last year. See note.
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