How the other half rents
Executive tenants fuel high-end rentals, writes property editor Michelle Hele
WHILE high-end property sales are also battling the sluggish effects of the current downturn, the executive rental market is continuing to perform strongly, with homes regularly renting for more than $2000 a week.
In the past, the rule of thumb for executive rentals generally has been the further out you are from a capital city, the cheaper the asking price, but the mining boom throughout the state has set that theory on its ear.
In some of the state’s more far-flung towns, the rentals being achieved for much more modest homes are above those of some of Brisbane’s luxury inner-city executive rentals.
The latest figures from RP Data show that Dysart in central Queensland has the highest median asking rental rate in the state at $2000.
According to realestate.com.au, there are eight properties listed for rent at Dysart, with the highest asking price being $3000 a week for a sixbedroom home.
Only one of the properties is listed for under $1100 a week – although for $700 a week you can rent a new onebedroom airconditioned unit.
At nearby Moranbah, the median rental is $850, although realestate. com.au shows there are 12 properties for rent ranging from $2000 a week to $900 a week, plus one option to rent a room for $250 a week.
The highest median asking rent in Brisbane is at Pullenvale, followed by Newstead, Brookfield, Tennyson and Kenmore Hills.
Jennifer Grainger of Place says January is traditionally the busiest time of the year for executive rentals.
Finding something to rent in pockets of the city became even tighter when the floods hit in January and demand for rental accommodation skyrocketed.
With insurance companies in some circumstances prepared to fork out rents, finding an executive or highend property became tough.
Six months on, those pressures are already starting to ease as some shortterm rents expire.
Grainger says January is busy in terms of executives moving interstate or from overseas to start the new year in a new position.
She says the higher-end rentals are different to ‘‘standard’’ rentals in many ways.
‘‘A lot of the houses that we lease would be $2 million to $3 million in value,’’ Grainger says.
Many of the homes she rents are not placed on the open market either, she says, as it is often more a case of if a suitable tenant comes along, the owners are prepared to rent to them.
As a former sales agent and working in conjunction with high-end agents nowadays, Grainger says she knows who owns what and what is potentially vacant.
‘‘I put people in homes that never get on to the market,’’ she says.
Grainger says anything within 5km to 7km of the Brisbane CBD and of a high enough quality is suitable for executive rentals.
Suburbs such as New Farm, Bulimba, Ascot, Hamilton and Spring Hill are popular.
She says it is not a market a lot of investors enter into, it is mostly personal homes which are able to be rented because the owner needs to move out for a period.
Grainger says Brisbane seems to top out at about $2500 a week – that’s $130,000 a year – although there can be exceptions.
As far back as 2007, a five-bedroom New Farm home was being rented for $5000 a week.
While weekly rental payments for executive homes can be higher than many homeowners pay on their mortgage, Grainger says rents can be far higher in southern cities such as Sydney and Melbourne.
Belle Property South Brisbane director Bettina Jude says high-end rentals have been active this year.
She has finalised three rentals for in excess of $1000 a week in the past couple of weeks.
A rental of $1400 a week was achieved for a Balmoral home, $1300 for a Newstead unit and $1100 for one in West End.
Jude says it is not only executives whose companies are paying their rents who are in the market.
She has noticed a growing trend in the quieter property market of potential buyers who want to try a suburb before they buy.
And she says with fewer properties selling, some owners of luxury properties who have had to move on are offering their homes for rent until the market picks up.
Jude says renting has become the new way to try a property on before you buy at both ends of the price scale.
‘‘We are getting a lot of inquiry at that high end,’’ she says.
She says executives in mining figure prominently at the moment.
HIGH-PRICED: It’s more than most mortgages but a $2000-a-week rental is nothing for cashed-up tenants.