Rental demand in ACT

As a IP owner in the ACT, I've definitely noticed some significant drop off in demand for share housing and Granny Flat type accommodation over the last year or so.

When I first built mine I was getting several emails per day from people wanting to move in, now I've got a vacancy and I'm getting a few vague enquiries per week even after dropping the price...Anyone had similar experiences?

Absolutely.

There's been a lot of stock coming onto the market for the last four years or so. Vacancy rates, which used to be around 1.5% consistently- virtually full- have risen. I've had to drop rents on several properties, and there's been no raises for several years.

There's still stock coming onto the market- yet another high rise in Belco has had strong demand for OTP.

So seatbelts on for the ride. Often supply drops off after a few years but that might take a while.

Thanks for the reply Geoff. Good to hear from you.

I sent you a PM a while back re: your GF in Queanbeyan but you never got back to me, wasnt sure if you were still around

I'm thinking back to the "glory days" of the rental crisis here in 2010, but it looks as though developers have severely overreacted to that, and now there's an oversupply.

I was renting rooms out (Belconnen) easily for $180/wk a year or two ago...now struggling to get someone at $140. Same with Granny Flat...got tenants ridiculously easily signed up for $290/wk, now only starting to get vague interest from people after lowering the price to $250.

Would be interested in hearing more about your experiences Geoff, either on here or PM. Cheers.

Whoops. Sorry for not replying.

The granny flat was due to be finished in December. It's still not finished.

Like everything else, expected rent has dropped. Initially $320, now $280.

Damn. Sorry to hear its dragging on a bit. What stage are you at and whats holding it up?

$280 is still a pretty great expected return. Bills included? Whats living space/layout etc?

Bumping my own post with a bit of an update.

Recently purchased a place in Florey - Settled July 25th. I negotiated access before settlement to show potential tenants around. Its a 4 bed + GF. I managed to have 4 separate tenants in the house and the GF tenanted all on settlement day..ridiculously easy...

Receiving
$240 p/w for master bedroom (+ ensuite + walk in robe)
$185 for bed2 (+ ensuite)
$160 for other 2 bedrooms
$260 for GF

I'm not sure if its because the property presents well and has a "new" feel about it (despite being built in 1984) or because maybe the rental slump has bottomed out. Would like to hear other IP owners views on the state of the market in the last few months.

Canberra is flat and/or falling. I reduced a rent at the start of the year when one of mine became vacant, but generally have been renewing at the same level. I don't tend to squeeze the last dollar out of my tenants, so they haven't complained about renewing at the same amount.

Canberra will be like this for another year, I reckon, then start to pick up slowly.

Renewed one last week at $500pw (has been the same for 3 years) - when tenants first moved in a couple of years ago it was priced maybe $30 under similar properties. I think I'm getting good value at the moment - similar properties are probably $480 - $510.

I dont think it's all doom and gloom. Properties in my area are selling well with prices even rising slightly over the last 6 months. Fewer properties on the market at the moment, which may just be seasonal with people waiting for Spring. In my suburb there are only 20 properties for sale and 5 of those are under offer. 14 have sold in the last 4 weeks.

Nemo30 said:

I dont think it's all doom and gloom. Properties in my area are selling well with prices even rising slightly over the last 6 months. Fewer properties on the market at the moment, which may just be seasonal with people waiting for Spring. In my suburb there are only 20 properties for sale and 5 of those are under offer. 14 have sold in the last 4 weeks.

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I agree.

For properties being sold there's still activity - especially for those priced less than $500k where FHB's are quite active.

As for the rental market - I've taken a bit of a hit with a couple of IPs but it's all good - we rode a pretty good wave with extremely low rental vacancies in the ACT for a while.

Cheers

Jamie

Nemo30 said:

Renewed one last week at $500pw (has been the same for 3 years) - when tenants first moved in a couple of years ago it was priced maybe $30 under similar properties. I think I'm getting good value at the moment - similar properties are probably $480 - $510.

I dont think it's all doom and gloom. Properties in my area are selling well with prices even rising slightly over the last 6 months. Fewer properties on the market at the moment, which may just be seasonal with people waiting for Spring. In my suburb there are only 20 properties for sale and 5 of those are under offer. 14 have sold in the last 4 weeks.

Click to expand...

Thanks Nemo - thats great on the ground info. I've been curious to whether the big drops in rents have corresponded to big drops in prices - havent really seen it be that bad.

Dont quote me on this, but my understanding is there'll be a detailed strategy report on the public service coming out year end. The job cuts announced so far were done without a thorough review on potential efficiencies. That may shed a lot of light on the extent of the cycle effect and how long itll last.

Redom said:

Thanks Nemo - thats great on the ground info. I've been curious to whether the big drops in rents have corresponded to big drops in prices - havent really seen it be that bad.

Dont quote me on this, but my understanding is there'll be a detailed strategy report on the public service coming out year end. The job cuts announced so far were done without a thorough review on potential efficiencies. That may shed a lot of light on the extent of the cycle effect and how long itll last.

Click to expand...

From my experience "Public Service" and "Efficiencies" don't belong in the same paragraph!

It may when your talking about potential efficiency gains!