Rental crisis peak?

Experts say ‘easing’

EXPERTS are tipping the Gold Coast’s extraordinary rental crisis to have passed its peak, with new data showing vacancy rates rising in almost every Gold Coast suburb.

Average weekly rental costs are also beginning to fall in many areas as investors return to the market, providing a much-needed boost to supply.

Data from SQM research shows vacancy rates in the north of the city had risen to an average of 0.9 per cent in September, having been at 0.4 per cent rate for much of the year.

In one suburb, the rate is at two per cent.

Prices are also showing signs of stabilising. In the southern Gold Coast, average weekly rental costs for houses were at $949 in October, down ten per cent from a $1055 peak reached three months earlier. The cost of renting a two-bed unit in the area was also down 11 per cent in the same period.

SQM Research Managing Director Louis Christopher said the data showed evidence that the rental market was “turning a corner”.

“Potentially we’re seeing a peak in the rents after what’s been an unprecedented rise in rental activity,” he said.

“… You look at the south end of the Gold Coast, the rents have essentially peaked. They peaked in late July and you can argue they have been falling since.”

Mr Christopher said there was normally a “seasonal impact” on the Coast which caused vacancy rates to rise in winter and trend down in summer, but that effect had been absent the last two years amid a surge in interstate migration.

“What we could be seeing now is a return to more normal conditions where the region is more influenced by seasonal factors,” Mr Christopher said.

“What we could also be seeing is people moving back to Sydney and Melbourne.”

While still well below healthy levels, the vacancy rate has risen in every Gold Coast suburb bar the 4218 postcode covering Broadbeach and Mermaid Beach, where it has remained stable at 0.7 per cent.

The lowest vacancy rate is in Southport, where it is 0.2 per cent – though even that is a rise on the 0.1 per cent in June.

The biggest is in the 4212 postcode, which covers Helensvale and Hope Island. SQM data shows the rate there sits at two per cent, having been at 0.8 per cent earlier this year.

LJ Hooker’s Pascal Pierre – who is Principal at its Helensvale, Pacific Pines and Hope Island branches – said availability of rentals had been boosted because investors had returned to the market.

“There has been some improvement. We are finding we have a few more properties available,” Mr Pierre said.

“With the slowdown in the market across the board due to the interest rate raises and the like, what it has provided, especially in bread and butter areas of the Gold Coast like Pacific Pines, Oxenford and Helensvale, is we’re finding a lot more investors are coming back into the market.”

Mr Pierre said it was the reverse of what had been happening during the market’s peak, when properties were being sold sight unseen for high sums, encouraging existing investors to cash out.

“I called it a frenzy,” he said.