Sunday, July 13, 2014

Rental tortoises and hares

The Residential Tenancies Authority has updated their quarterly data for weekly rents based on new rental bonds lodged during the period. Albeit in an annoying excel format structure this usually throws up something of interest. Data is provided back to the March quarter 2009 and a comparison of the coastal regional centres is quite illuminating.

The two largest rental sectors shared across these cities are generally 3 bedroom houses and 2 bedroom units so I have chosen those from the data provided:


 

It may come as a surprise to many to find that Cairns is now a relative outperformer over the period on rental increases. Particularly relative to Townsville, shown here in traditional brown. However should that necessarily be seen as a positive?

Cairns has a higher proportion of renters v home owners compared to the other centres (and consequently a higher proportion of rental stock). These rental increases in Cairns while still modest are despite a weak labour market over the period, and also correspond with a subdued building approvals supply recovery running about last as a comparative percentage of population.

The RTA also supply an aggregate of rental bonds outstanding and the change over the past year may even appear anomalous to the above graphs but actually aligns pretty well with the pattern referred to above on building approvals.

 
 
Some caution as the regions provided here don't strictly align with the other data. However there are some aspects on this related to Aquis where I think rental impacts while addressed may have been downplayed if anything in the EIS. Particularly crowding out of affordable student accommodation around JCU and withdrawal of tourist accommodation stock for construction workers. Will perhaps defer further discussion on that to a subsequent post after closer perusal of the EIS ......
 
 

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