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A Slowing Palm Beach Rental Market
If you listen to the hype in the media, you would think the streets of our city were paved in gold. Unfortunately, this is not the case and there are some home truths that need a look-see.
Prior to the Commonwealth games, we were in the midst of a rental shortage as many investors had taken their properties off the permanent market to either use during the games or lease out short term for a fairly decent return. Who can blame them? Some of the prices we have heard were well worth the effort. The vacancy rate pre-games was around the 1%.
The post-games rate though is a very different story. By the end of June 2018, we were experiencing a vacancy rate of 2.1%. We are experiencing large numbers of vacant properties and decreased enquiry for rentals. A vast number of tenants who came to the coast to either work on infrastructure for the games or be involved in the administration have also left the coast.
For example, in June of 2017, we fielded 1073 rental enquiries via email, internet or phone calls. In the same period of 2018, the figure was 690. In May of 2017, the figures were 1125 with May 2018 the number being 773. The lesson in this for us property managers is we cannot be complacent in our appraisal of current rental values and be vigilant of the current market conditions.
As property manager of nearly 30 years in the area, I have experienced this cycle a few times in my career but with the advent of social media and vast amount of online information portals, I feel the message on vacancy rates is a bit distorted.
Palm Beach has come into its own in the last 18 months or so and we have had a great time with low vacancies and great competition for rental properties but we knew it had to slow up as some stage. I just did not expect such a rapid decrease in such a short space of time.
Investors need to be mindful of vacant days on market for their investment properties. Every week the property is vacant is eroding the income of the investment. Sometimes it can be as little as $10 per week which attracts a whole new range of tenants. Listen to the advice of your property manager as they are in the market place every day.
I was in a major shopping Centre recently and had 3 sales ladies lament to me their insecurity with their employment in retail on the coast I have also noticed many eateries on shortened hours of operation, this affects the number of tenants available for us to market to also.
Residential Investment is a game of chess. We need to have a strategy on our moves, take a step back when necessary and don’t be afraid to go for a short-term gain if it benefits the long-term game.
For further information contact:
Dot Hamilton, Director of Property Management & BDM, First National Real Estate Palm Beach & The Pines, on (07) 5559 9600.
by Dot Hamilton A Slowing Palm Beach Rental Market
palmbeachfn.com.au July 2018
First National Palm Beach
Cnr of 6th Ave & Cypress Terrace, Palm Beach, QLD 4221 Ph: 07 5559 9600