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Rents now tanking in three capital cities. Who's next?
Topic Started: 24 Jul 2015, 06:18 PM (9,318 Views)
stubby
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miw
29 Jul 2015, 08:21 PM
We'll just have to agree to disagree. Sure there is impact on the high end rentals, but I just don't think CSG and coal are a big enough factor in Brisbane's economy to have any impact on the normal rental market whether it be for houses or apartments. The boom sure as hell didn't drive rents (or even house prices for that matter) up, so things getting back to normal ain't going to bring them down.
OK, but it sure seems strange that that quantum of higher-end income can just disappear without any ripple effect on the larger SEQ economy.

It is certainly wreaking predictable carnage on the micro level, for those families actually experiencing it.

:(
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miw
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stubby
29 Jul 2015, 09:10 PM
OK, but it sure seems strange that that quantum of higher-end income can just disappear without any ripple effect on the larger SEQ economy.
Oh. It will effect the larger economy all right. But we'll probably not see too much of the effect because it will to mostly be hidden by the resurgent tourism and education (and even agricultural) sectors juiced by the lower aussie dollar which was in turn brought about by the decline in energy prices. Queensland, unlike WA, is quite well hedged.

Of course this is very cold comfort to the people who were getting $90k and are now back to getting $50k or less.

Also, rents are sticky. They are slow to rise when the economy picks up, but it takes a lot to push them backwards too. It is the last thing that families at least cut back on.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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ggriff
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miw
29 Jul 2015, 09:32 PM

Also, rents are sticky. They are slow to rise when the economy picks up, but it takes a lot to push them backwards too.It is the last thing that families at least cut back on.

Moving to a cheaper rental is actually one of the easiest ways to save money for tenants.
Of course moving is a pain and is not free either but these costs can be recouped rapidly.
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stubby
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ggriff
30 Jul 2015, 12:22 AM

Moving to a cheaper rental is actually one of the easiest ways to save money for tenants.
Of course moving is a pain and is not free either but these costs can be recouped rapidly.
+1

One of the major advantages of renting is the ability to quickly and cheaply adapt to changes in family income and circumstance, whether positive or negative.

In miw's defence, though, he was referring to the stickiness of a rental rate associated with a particular unit, rather than a particular tenant.
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I think the next to tank would be Adelaide. I have been watching the rental market closely for the past year and the market has noticeably changed in just the last 4 months. Houses are not renting out as fast compared to last year. Check out this nice 5 bedder, 2 bath house in a nice quiet neighbourhood. It was sold in May 2015 for 500k and immediately advertised for rent for $500/week by the end of June it was reduced to $480 and just yesterday it was relisted as "new" with a further reduction to $460 and new photos. Investor appears to be desperate now. This is just one out of the 8-10 rentals in the neighbourhood that are sitting vacant for longer than 4 months with no interest. Things are just going to get uglier here in Adelaide as the unemployment rate rises to double digits.

https://www.realestate.com.au/rent/in-athelstone,+sa+5076/list-1?adcall=1438177523676


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miw
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stubby
30 Jul 2015, 12:35 AM
In miw's defence, though, he was referring to the stickiness of a rental rate associated with a particular unit, rather than a particular tenant.
Yes.

Although moving is a terrible pain. In Germany they have a saying that two moves equals one fire. I'd say international moves have more like an exchange rate of 1.5 to one.

And in my non-defence, I also said that rent is one of the last things that *families* cut back on when the belt has to be tightened. Holidays, boutique beer, the new car and eating out get cut back first. Singles and people without kids are much more flexible.
Edited by miw, 30 Jul 2015, 01:50 AM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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stubby
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miw
30 Jul 2015, 01:47 AM
Yes.

Although moving is a terrible pain. In Germany they have a saying that two moves equals one fire. I'd say international moves have more like an exchange rate of 1.5 to one.

And in my non-defence, I also said that rent is one of the last things that *families* cut back on when the belt has to be tightened. Holidays, boutique beer, the new car and eating out get cut back first. Singles and people without kids are much more flexible.
Meh, fire is not so painful, as long as it's only one's goods that are lost. In miw's German terms, I've experienced "14" fires, plus 2 real ones, in my adult life.

One of the real ones was fairly spectacular. A hiker got lost and, dehydrated and disoriented, decided to light a signal fire in order to be found. 24 hours later, the resulting fire had burned through 262,000 acres and 5,500 homes, including ours. My wife and I woke up to TV news coverage of this disaster in progress, and quickly realised that we had a better view of the fire out of our lounge-room window, than any of the network TV cameras. The cops evacuated us 15 minutes later.

We lost pretty much everything in that fire, but in the aftermath learned how real and generous and open American charity can be (this occurred in San Diego). While I still struggle with faith in nominal Christian terms, I have been on the receiving end of Christian charity at a time of need, and it is a life-affirming experience beyond all ordinary measure.
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The Whole Truth
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K-town
29 Jul 2015, 11:30 AM
Sounds great. Until you want to go to the footy, see a decent band, take the kids ice-skating, go to a top restaurant, have a beer in a pub where the only clientele isn't a front bar sparsely populated with societies outsiders.... then you need a city.
People 200k or 300k outside of major cities do a lot of that, just not on the same scale. Not with the same panache. Consider a rural town like Margret River down from perth, or Denmark. Montville and malaney up north of brisbane. Airlie Beach? etc etc? Ever been to Eden, south of that shithole sydney? I know where I'd rather live all other things being equal. Imagine driving off to work and arriving after a 15 or 20 minute drive up a lovely country road. That woukld be something wouldn't it.

Still, if you can't live without ice skating and premier footy games, then you had better stay in a big city I suppose.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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miw
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The Whole Truth
31 Jul 2015, 03:20 AM
People 200k or 300k outside of major cities do a lot of that, just not on the same scale. Not with the same panache. Consider a rural town like Margret River down from perth, or Denmark. Montville and malaney up north of brisbane. Airlie Beach? etc etc? Ever been to Eden, south of that shithole sydney? I know where I'd rather live all other things being equal. Imagine driving off to work and arriving after a 15 or 20 minute drive up a lovely country road. That woukld be something wouldn't it.

Still, if you can't live without ice skating and premier footy games, then you had better stay in a big city I suppose.
Indeed. And there is a scale of places between Montville/Maleny and Brisbane as well. There is absolutely no reason why anyone has to put up with the expense of living in Sydney, any more than they have to put up with the expense of buying a new iPhone every year. It is a luxury expense.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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A luxury expense to be sure but with dubious returns. When you're raised in a city you have no experience of life in a quiet modern town, there is this mindset that says cities are better. But if that's the case why do people living in cities always take their holidays far away. Down on the beach or up in the mountains? I don't know anyone from up in brisbane who ever took their annual holidays in Sydney because sydney is such a great place :lol
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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