Rents going down

Perth and Darwin are a couple of sick puppies.

 

I definitely won't be increasing my tenants rest this year. Wage growth in SA has actually been negative for the past 12 months.
http://www.adelaidenow.com.au/busin...lse-in-australia/story-fni6uma6-1227481816012

EARNINGS in South Australia fell in the 12 months to May this year while they grew almost everywhere else in Australia.

Seasonally adjusted full time adult earnings in SA dropped 2.1 per cent, including overtime earnings, to $1401.80.

They did increase slightly from the November figure of $1396.30.

The only other state in which earnings fell was Queensland, where they dropped 0.6 per cent to $1509.80.

Nationally full time adult earnings grew 1.8 per cent to $1545.60.


Combined with an inflation rate of 1.5 per cent, a 2.1 per cent decline in earnings means there will have been a drop in South Australians’ purchasing power over the year.

Nationally, measured in May this year, the mining industry continued to have the highest fulltime adult average weekly ordinary time earnings in Australia at $2536.30.

The industry with the lowest fulltime adult average weekly ordinary time earnings was the accommodation and food services industry ($1060.80).











FULL TIME ADULT EARNINGS

May 2014 May 2015 Change

South Australia $1431.90 $1401.80 -2.1%

NSW $1503.90 $1561.50 3.8%

Victoria $1444.20 $1457.70 0.9%

Queensland $1520.40 $1509.80 -0.6%

ACT $1692.70 $1736.00 2.6%

Western Australia $1736.80 $1784.80 2.8%

Tasmania $1284.00 $1332.70 3.8%



*includes overtime

 

Rents going down, or, values going up?

 

I've had a 2 lease renewals and a new tenancy in western Sydney this month. $380 to $395, $370-$380 and $500-$530. Better than 12 months ago when I had to drop rents for renewals.

 

I've put 3 of my rents up in Adelaide this year. Had to put a Perth one down 10%

 

Dropped rents in Rockhampton on a couple by $15 per week but have had a few small increases in Brisbane and rented a recent purchase in Adelaide in under a week at 6.4% yield.

 

IP rent has been neutral for 3 years.
Can't wait for the tenant to come and ask for a $50 weekly reduction.
Hopefully that 1000 Syrian migrants will arrive here and get into a bidding war for my property in time to save me from impending doom.

 

I don't know that will solve your problem - I wonder if refugees would be in Department of Housing properties with rents capped. Keeping any portion of bond on DHS properties is highly unlikely, regardless of the reason.

 

What area may I ask?

 

Paralowie

 

That's pretty good! I'm getting 6.56% at my house at Salisbury Downs.

 

Thats even better, there seems to be plently of demand for rentals in the northern suburbs.

 

Definitely! On my first open I had 8 groups of people through the door. Some of them were the stereotypical single mothers with kids but I ended up selecting a couple of concreters who were mainly after the house for their mum as they spend half the year up in Darwin. Touch wood but they've been perfect tenants so far and are looking at staying there long term, which is another reason why I'm not going to be too pedantic over raising rents at every opportunity.

 

Both of these are in 5108 post code which is at 1.2% vacancy - 63 properties out of 5250

 

Brisbane will surely be a renters dream in 12 months with the amount of OO stock being converted to IP and taxi drivers talking it up as the place to buy. Plenty of new stock coming to market I read somewhere - about double the net migration rate?

 

For the first time ever in a few years, I'm having trouble renting out a townhouse in Camp Hill.
Vacancy rates since built new 2-3 years ago for 11 brand new townhouses in Camp Hill and Annerley has been really low at about 0.5%.
Now one has been vacant for about 1 month and have dropped rent a couple of times with not much demand.
I'm guessing if other tenants don't renew their leases or find out about the drop, they will want a reduction as well, or move on.
Looks like we're gonna take a bit of a pay cut for a little while....

 

It was $560 for a 3 bed, bathroom + ens, single garage.
We're asking $525 at the moment.

 

Hang in there, compadres.

Rents may go down for a while but... (and I must preface what I'm about to say with an assumption that almost all of you fellow investors have been good boys and girls and as such, will have IO, variable loans with attached offset accounts...)... word on the 'media' street is thst there will be two interest rate drops in the coming 6-12 months.

If this does happen, this will help offset the drop in rents significantly. This is because you all must remember that as interest rates get closer and closer to zero, the savings in interest get exponentially greater! I.e. a reduction of a mortgage of say 4.10% interest down to 3.60% = a significantly reduced monthly mortgage bill.

Of course that all depends on whether these interest rate drop 'parties' will get rained on by any new APRA circumventions they may have up their sleeves for the lenders...