How the other half rents

Ex­ec­u­tive ten­ants fuel high-end rentals, writes prop­erty edi­tor Michelle Hele

The Courier-Mail - Property - - Insight -

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.

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