Rental supply glut


Rental supply glut

Rentals galore: Alex Scott and Staff Leongatha property consultant Allan Steenholdt and property manager Carly Roughead show the long list of rental properties currently on the market, over four times the number as at the same time last year.

THE oversupply of rental properties in South Gippsland and Bass Coast is at its highest in a decade according to local agents, causing pain to many using this as a retirement income.

The departure of Victorian Desalination Project workers has left large gaps in the rental market throughout a number of towns, including Wonthaggi, Inverloch and Leongatha, while changes in the renting demographic and economy are also having an impact.

Stockdale and Leggo Wonthaggi principal Pat Barry said this is the most available properties he’s seen in 10 years.

“This is the first time in many years we’ve had an abundance of property,” he said, adding rental prices had also dropped.

“When the desal workers were here, the normal properties became more expensive. We’ve come back around 15 per cent, and even 20 per cent in some parts.”

Mr Barry said the benefit of the desal workers leaving is the number of high quality homes now accessible to others.

“In the two to three years before the desal came, there was slow and progressive investment where people were buying properties in Wonthaggi suitable for the rental market, with many of them brand new,” he said.

“As a result, the quality of rental stock is dramatically better. No doubt we lost people out of the area that couldn’t find family accommodation and went to surrounding towns, but in time that will be addressed.”

Alex Scott and Staff Leongatha property manager Carly Roughead said residents returning to Wonthaggi was one of the reasons Leongatha was facing an oversupply of rentals.

Ms Roughead said while she only had five properties listed this time last year, she was now averaging 22.

“We’ve experienced the flow and effect from the desal,” she said.

“A lot of the locals moved out of Wonthaggi to this area when the workers came. Now the desal is gone, they’ve moved back home to Wonthaggi and we’re losing them from here.”

Ms Roughead said lifestyle changes in the younger demographic were also having an effect.

“A lot of people are sharing houses now, and it’s more common to have two or three couples living together,” she said, adding the lack of jobs in Leongatha was also a factor.

“It’s all related to the cost; the average price of a house is between $260 and $280 a week, and then you’ve got electricity and water bills and everyday living expenses. Some people are struggling to afford it, so they split it three ways.”

Ms Roughead said she expected interest to pick up around the end of the year when university students finished school and new teachers, doctors and vets moved to the area on new contracts.

Stockdale and Leggo Inverloch property manager Naomy Hendricks said the departure of desal is also affecting rental prices in Inverloch.

“Landlords aren’t getting the high rental returns they were and prices are coming down quite considerably; what we’re doing is ringing landlords and adjusting to the new rental market,” she said.

Ms Hendricks said they do have a large number of furnished properties available, which while ideal for desal workers, were not in demand at present.

“A lot of the properties that are furnished, we’re trying to get landlords to holiday rent them as there’s just not a furnished demand anymore,” she said.

“Either landlords are taking them back to use themselves or putting them on the holiday market. I’m trying to get our list down to mainly unfurnished properties.”

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Posted by on Oct 30 2012. Filed under Featured, News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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