Tuesday, July 21, 2015

The regional rental gap

A few media reports lately on rental trends from property research houses but can't see why the quarterly data from the RTA based on actual new bonds lodged isn't the best data. The June quarterly data for the NQ cities shows a very different story for each over recent years:

 
In the three largest rental categories Cairns has opened up a significant gap over its southern neighbours in all as a relatively expensive place for rental housing.
 


 
 
Meanwhile, the real estate perma-bears at Macrobusiness have an interesting analysis and warning on the previously high flying Darwin market as the $34 billion Ichthys LNG Project approaches completion: Sell Darwin housing now! ($)
 
Look out below!

4 comments:

  1. Interesting rents so much higher in Cairns. Why hasn't supply expanded? Council too restrictive of development?

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  2. No, don't think it's a council issue Gene. Think it's just a cyclical phenomenon. Building approvals seem to me to have been running ahead of what is rational in both Townsville and Mackay. Not sure how that translates into actual construction though. While building in Cairns has been running behind what would seems rational.

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    1. That makes sense. Any data on the rental yields in the different cities? I might look myself later. I recall seeing it somewhere recently. I'm amazed the median rent has dropped so much in Townsville. They must have had an extraordinary growth in supply!

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    2. A quick look at the latest building approvals for LGA's and YTD to May has Townsville at 1,383 and Cairns 616 total dwellings. That doesn't seem to make sense relative to either population size or growth. Have queried that before and Pete had a closer look at the Townsville numbers but can't recall the details. The missing component in Cairns remains units where there is activity emerging but doesn't seem to have come through yet in the ABS data. The significance for Cairns is also that it has a relatively high proportion of rentals.

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