在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
in relation to established suburbs not areas where there is new development and oversupply forces rents to go down what are some other reasons?
Major chemical or nuclear contamination?
im guessing from that answer theres not much chance unless something radical happens?
If you look at Cairns you can see exactly what happens with rents.
When employment opportunities lessen, the population moves, in Cairns it was the southerners going back home. Less jobs, less people, more vacancies. Rents are reduced to attract people to your property. Some of the holiday accommodation becomes permanent rentals, increasing the competition.
I was getting $320pw now after 15 weeks vacancy am lucky to get $250pw
buy in Sydney /metro. rents have been on the up for years.
james start said: ↑
in relation to established suburbs not areas where there is new development and oversupply forces rents to go down what are some other reasons?Click to expand...You can still experience over-supply/demand imbalance in more established areas. From late 2010 to mid to late 2011 I experienced this in suburbs 10 km radius in Bayside region of Melbourne. These were houses. Rents were not advertised above-market (recent historical market comps), however I could not remember them taking so long to let. We dropped rent a few pegs and filled them quick smart.
Whether it's from an over-supply of new stock or a slowing demand from immigration, students, or whatever sometimes if rents have escalated for a period, they need to establish an equilibrium of sorts before their next run up.
Outer suburbs and new estates of course have bigger problems in that regard, as there is generaally no shortage of stock and with lagging amenity, rent drops are necessary to secure tenants.
The under-supply of housing myths are still disseminated by the datasphere. The only tight market, where my rents are rising is Sydney. The rest, I keep them the same, especially for good tenants, until the conditions allow rent rises to resume again.
The short of it is, that even in-fill areas can have periods where rents stagnate or even have to fall a little to allow for the catch-up of supply/demand to re-establish an equilibrium.
Unemployment is the biggie.
For most people who stay employed they carry on as usual. But when the income dries up then they have to take action. This can mean moving back with parents, moving in with friends, moving to a cheaper property etc.
As in the early 1990s, when demand falls rent prices fall too, as landlords compete for fewer tenants. A sudden glut of properties on the market when you have a vacancy means you will find a tenant quicker if your price is competitive.
I recall a few years ago there was a chemical problem in one of Melbourne's outter suburbs. Another development had landfill problems where the ground was unstable.
The articles of the day were all about the falling property values but I imagine that the rents went down as well. It's actually likely that the rental yield itself increased because the prices fell more than the rents.
A major contributor to the US property prices falling was due to changing demographics and employment. With 10% unemployment a lot of people couldn't afford to pay their mortgage. This does a lot of damage to the prices in the area. Other people get a job elsewhere, so they sell up and move. The problem is they can't sell because prices in the area are now depressed, so their only real choice is to hand the keys back to the bank, further depressing the market and also causing the banks to take a loss.
Rents fell in 2009 in the UK (I think), because of a combination of an oversupply of property that wouldn't sell, or the owners weren't willing to accept a realistic price, so letting it instead, and rising unemployment. So if the Australian economy tipped into a recession then I'd expect to see falls.
That said, despite a slow economy they've been rising in London over the last year or two. Banks are demanding an impeccable credit rating and a minimum of a 20% deposit, which has made it very difficult for buyers to enter the market. So despite things not being great, rents have risen by 10% per annum due to there being more people requiring rental accommodation.
Any town that relies on a major employer, when sh.. happens and the employer runs into a go slow, staff get layed off and rents plumit.
We have a couple of houses in Roxby and a few years ago the mine was slowing down due to GFC, 1 shaft was shut and they were running on 2 shafts then .... the ore cart thing droped down 1 shaft and broke a lot of stuff, so the mine was down to 1 shaft out of 3, therefore mine production was down to 33% so staff dropped, so rents dropped, think ours went from $450 wk to $300 wk, remember it was about 30% drop in rent, it's only now that the rent has moved back up.
It's all supply and demand, economics 101, very basic. Hard part is working were / who it will impact and trying to budget or plan for it.