We recently listed for rent a stunning fully furnished executive home close to the city. As is normal practice we contacted the various executive relocations agents that work with Brisbane’s major employers, and especially our active mining and resource companies, to see if they had any clients interested. We have had some good enquiry from international executives over this past fortnight, but they’re smaller in number than we’d expect for this time of the year.
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.
The Real Estate Institute of Queensland last week released their latest Vacancy Rate survey and they also pointed to a greater supply of rental homes during December. According to the survey data, over one third of REIQ member agencies reported an increase in investor activity which subsequently added to the rental pool.
“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.”
Forecasters BIS Shrapnel have also been studying the upcoming supply of inner-Brisbane apartments, with construction of many buildings due for completion in this next 18 months. BIS Shrapnel estimates that as of November 2013, over 4,000 apartments in inner Brisbane were under construction in projects scheduled for 2015-2016 completion. ““This level of completions is likely to result in excess supply pressures emerging in the inner Brisbane market by 2015-16,” said their Angie Zigomanis.
What are we seeing on the ground right now? After a quiet December our leasing team recorded one of our busiest January’s on record. Tenant numbers at inspections have been strong but it’s fair to say that tenants are doing their homework and becoming slightly more selective. Homes that are well-presented, maintained and represent fair value are generating multiple applications.
The corporate letting market is tougher with supply still quite high. But overall, for now at least, landlords in most parts of the inner-Brisbane rental market are still enjoying a relatively healthy demand.
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