Posted by Rob Honeycombe on 23 January 2008
The new year is off to a flying start with enquiry to our office from new tenants at extraordinary levels over this first 3 weeks. And the final rental stats for 2007 give us a clue why – the number of rental homes within Brisbane’s inner city has experienced a significant drop, creating new pressure for tenants and forcing rents to further record highs.
The Residential Tenancies Authority record the 21 suburbs around the CBD as “inner city” and in the December quarter the total number of rental homes in this area dropped by a very large 428. The CBD and Spring Hill were worst hit with a 7% drop in their total supply of rental homes. Owner-occupiers are buying and moving into the inner city suburbs in big numbers, often into previously rented homes. In addition there’s a continued trend for apartment buildings being converted to short-stay hotel operations – and this is forcing tenants out of the inner city. Across the whole of Brisbane the number of rental homes grew just 2,698 during 2007. The total bonds held by the RTA shows a market that’s just not keeping up with demand.
Take a good look around within a two to three kilometre radius of the CBD and this is where Brisbanites and new arrivals want to live, but there’s very few cranes in the skyline. We’re not replacing those lost rental homes. Not surprisingly median rents have jumped again, with an inner city two bedroom apartment now costing 22% more than it did just two years ago and a three bedroom home also up 25%.
You now have median rent for a two-bedroom apartment in the CBD at a whopping $495 per week, which was up another 13 percent during 2007. With little prospect of new apartments and homes coming online we’d expect 2008 will comfortably show double-digit growth in rents yet again.
Tags: Brisbane housing supply, Brisbane rents, Residential Tenancies Authority, Spring Hill Brisbane
Posted in Brisbane CBD, Brisbane's rental market, Spring Hill | No Comments »
Posted by admin on 23 January 2008
The time a property takes to sell is often a good indicator of the state of the market. So in our inner city at the moment there’s no doubt that market’s very healthy. Recent stats from RP Data report Brisbane’s average house was taking just 25 days to sell and an apartment 24. These are much quicker than you’d usually expect, confirming what is rightly seen as a seller’s market. While these sort of stats reports have only recently become something close to reliable, we’d suggest a 40-50 day time on the market might be considered a ‘balanced’ or normal period, with buyers and sellers on relatively equal footing. Darwin’s averages are currently 54 and 65 days for example, more than double here in Brisbane.
The national winners? Melbourne and Canberra are both averaging less than 25 days on the market for house and apartments. With some stockmarket investors looking for a new place to invest it’ll be interesting to watch the next few months…
Tags: RP Data, time on market
Posted in Brisbane's sales market, trends in Brisbane property | No Comments »
Posted by admin on 22 January 2008
Morris and his wife Esther went to the state fair every year, and every year Morris would say,” Esther, I’d like to ride in that helicopter.” Esther always replied, “I know Morris but that helicopter ride is 50 dollars and 50 dollars is 50 dollars.”One year Esther and Morris went to the fair and Morris said “Esther I’m 85 years old. If I don’t ride that helicopter I might never get another chance.” Esther replied, “Morris that helicopter is 50 dollars and 50 dollars is 50 dollars.” The pilot overheard the couple and said, “Folks I’ll make you a deal. I’ll take the both of you for a ride; if you can stay quiet for the entire ride and not say a word I won’t charge you! But if you say one word it’s 50 dollars.”
Morris and Esther agreed and up they went. The pilot did all kinds of fancy manoeuvres but not a word was heard. He did his dare devil tricks over and over again, but still not a word. When they landed, the pilot turned to Morris and said, “By golly I did everything I could to get you to yell out, but you didn’t. I’m impressed!”
Morris replied, “Well I almost said something when Esther fell out but, you know, 50 dollars is 50 dollars!”
Tags: bad but clean jokes
Posted in just for fun! | No Comments »
Posted by Rob Honeycombe on 2 January 2008
Residential investment property in Australia is largely owned by individuals, with Mum and Dad landlords owning the lion’s share. But with so many of us recently injecting funds into superannuation there’s an ‘unnatural’ limit being placed on the supply of rental homes. Why? AMP and the other big super funds don’t own a bunch of residential property and generally self-managed super funds can’t borrow from a bank, so they rarely own rental homes. In the USA a lot of residential property is owned by companies, with many of them large trusts that own upwards of several thousand apartments. But Australia’s residential property has rarely offered returns that would attract the corporates, who’ve turned to commercial and industrial real estate for the stability of long leases and indexed rents.
There may be some change on the horizon here. In August Labor announced their $603million National Rental Affordability Scheme, an incentive package designed to entice Australia’s institutions to supply 50,000 new rental homes over the next 5 years. The scheme would see eligible tenants receive a 20% discount on market rent with the institutional property investor committing to this for 10 years in return for an annual handout from the government. The feds will pay $6000 per annum and each state government will chip in $2000. Hopefully new Housing Minister Tanya Plibersek now has this policy’s implementation right at the top of her 2008 ‘to do’ list.
Fifty thousand homes is only a bit more than a drop in the bucket as far as increasing supply and helping with rental affordability. But more interesting to watch will be the willingness of our big end of business town to take another look at residential investment.
Across the nation 30% of us are renting and many tenants are now looking for longer leases and are happy to pre-commit to annual rent increases. While rental yields are still low relative to the returns available from non-residential property, there’s simply so much money flushing about in superannuation that residential may soon be back on the shopping list. Have a look at www.equityresidential.com for one American company that offers a very tenant-oriented service. They own 160,000 residential apartments and are able to use the efficiencies that come with being a massive landlord. For example if there’s maintenance needed and they don’t have it done within 2 days they give the tenant a rent holiday! And their tenants never have to worry about the landlord selling up or moving back in.
If Australian institutions can find the viability in residential property investment and offer tenants an attractive renting alternative, the way we look at our rental market may just be about to get a shakeup.
Do you think institutional investors will start buying residential property? Tell us what you think!
Tags: Brisbane housing supply, Brisbane rents, superannuation, USA
Posted in Brisbane landlords, Brisbane's rental market, trends in Brisbane property | 1 Comment »
Posted by Rob Honeycombe on 2 January 2008
It’ll be another couple of months before the final stats are in but there’s no doubt 2007 will go down as a very strong year for sales prices in Brisbane’s inner suburbs. For example West End’s median house price jumped $200,000 or 41% over the past 2 years, and Spring Hill’s median apartment prices have leapt 40% in the same period. A new Highgate Hill price record was set in early 2007 with a Laura Street house selling for $2.65million. (That mark’s ready to be well and truly broken though, with a riverfront home now on the market chasing offers over $8million!)
In Brisbane City itself the median house price has jumped more than $150,000 or 34% over the past year, after flat-lining for the previous 3 post-boom years. Most of those houses are in the Petrie Terrace precinct and it’s no doubt gaining a boost from the old barracks redevelopment with new cinemas, supermarket and 5 storey commercial offices to be completed this year.
Tags: Brisbane home prices, Petrie Terrace Brisbane, Spring Hill Brisbane
Posted in Brisbane's sales market, Highgate Hill, Spring Hill, West End | No Comments »
Posted by admin on 2 January 2008
Why are they called apartments when they’re all stuck together? Why can’t women put on mascara with their mouth closed? Why is lemon juice made with artificial flavour, while dishwashing liquid is made with real lemons? Why is the person who invests your money called a “Broker”? Why isn’t there mouse flavoured cat food? Who tastes dog food when it has a “new & improved” flavour? Why do they call the airport “the terminal” if flying is so safe?
Tags: bad but clean jokes
Posted in just for fun! | No Comments »
