The May real estate statistics are due out in the next couple of weeks, and they’re expected to show the Sunshine Coast had another month of unusually high sales volume and prices. And that may not be good news for renters trying to find vacancies in a market already rated “severe” by the Rental Housing Index when it comes to affordability and the stock of rental housing.
The Index, created by the BC Nonprofit Housing Association and Vancity Credit Union, puts the Sunshine Coast at 252 out of 284 markets it tracks in Canada (using 2015 numbers). It also says renters make up about 16 per cent of Coast households.
Jennifer Chapman contacted Coast Reporter with her family’s story, which is typical of others we’ve been hearing.
Chapman said she and her husband are young, working professionals with two children. The family moved into a new rental home in February. Now it’s being sold. They signed a two-year lease, which Chapman hopes will give them some protection, but she’s worried about being able to find another place if they need to.
“We’ve actually moved quite a bit because of different situations with rentals,” she said. “Even before [February] we lived in a place where they were going to put it up for sale. That was two years ago. We moved out. We found another rental and we were in that [home] thinking we would stay another two to four years. Then the owners wanted to move back in, so we had to move again. It’s a really hard market, and it’s really hard to find houses within a price range that’s decent.”
Chapman added that their goal is to save enough for a down payment on a house, but steadily increasing real estate prices are making that harder as well.
Holywell Properties is a property management firm serving the Sunshine Coast. According to managing broker Adam Major, they’ve noticed a steady drop in the number of homes offered for rent, leading to what the company estimates is the lowest vacancy rate in a decade.
“We usually carry around 10 to 15 vacancies at any given time, but over the last few months we have averaged three to five,” Major said. “I don’t know that we have more people looking for rentals over what we normally have at this time of year. The issue seems to be a lack of supply, which is brought about by people selling in Vancouver and the Lower Mainland and buying on the Sunshine Coast. The activity in the residential real estate market appears to be taking supply from the existing rental market.”
The Town of Gibsons and District of Sechelt also have on their radar the potential negative impact of more landlords opting to enter the short-term rental market, through services like Airbnb.
In April, Sechelt Coun. Darnelda Siegers noted, “We have issues with Airbnb and VRBO [another popular short term rental service]. In my other job [mortgage broker] I regularly have people approaching me in February, March, etc., of every year, and more so lately, indicating that their rental is no longer going to be available because it’s going to be a short-term rental.”
In a recent report to Gibsons council, planner Andre Boel said, “The exact impact of the ‘sharing economy’ is still unclear. For some people, short-term rental may help to pay for mortgage or other cost. Providing accommodation for visitors may have positive effects for the local economy. On the other hand, it may reduce the number of rental housing units available.”
“I don’t think you can blame individual property owners for wanting to maximize the return on their investments, but the people bearing the brunt of the increase are those on marginal and fixed incomes who can least afford it,” Major said.
Chapman, though, said renters of all backgrounds are in a bind right now. “It’s not just low-income people who are struggling. It’s also middle class people, as well, who are [coming] here to invest in the community. We still struggle.”
Major said he sees things turning around, but not in a hurry, because what it will take is more construction. And, as Chapman sees it, it’s not just more construction, but the type of construction. “In the city there are different types of co-op housing you can get into, or more options on townhomes and stuff. You don’t really have that [here], especially in Sechelt,” she said.
In the meantime, Sunshine Coast renters are likely to continue to feel pressure from an overheated Lower Mainland market.
Originally Published On: http://www.coastreporter.net/
Looking to rent? Don’t try this Coast suburb
CALOUNDRA vacancy rates are so tight, a rental can be listed and approved within 24 hours.
Its 0.6 percent vacancy rates are the tightest in the state compared to 1.4 percent for the Sunshine Coast and 2 percent for Brisbane surrounds.
The REIQ released its September quarter vacancy rates yesterday revealing a general tightening of most rental markets throughout regional Queensland as employment opportunities attract workers.
That trend is said to be responsible for the Coast’s low vacancy rates with a smorgasbord of new infrastructure bringing jobs.
Henzells Agency operations manager Katherine Allan said Caloundra West, Golden Beach, and Birtinya were the chief offenders.
“It is very difficult for potential tenants, specifically in the Caloundra West area, we have properties gone within a day,” Ms. Allan said.
“One early this week was listed at 3 pm and someone applied for it and is likely to be approved. They haven’t even seen the property and are going off online only.
“That makes it difficult, great for the landlords obviously.
“With Aura coming in and the new school, being in that catchment plays a massive factor. We have had a large number of inquiries from hospital workers too.”
She said it painted a great picture for potential investors who were spoilt for choice for tenants.
“Most landlords have a choice between multiple tenants and it comes down to past rental references,” she said.
“Some people tend to miss out, sometimes more than once. But we have a leasing consultant who works really hard to avoid that.
“Traditionally we find at this time of year the rates tend to slow down but it doesn’t appear like they will this time.”
Rockhampton, Livingstone and Gladstone shires had the highest rates at over 5.5 percent.
Originally Published: www.sunshinecoastdaily.com.au
Rental market puts the squeeze on the Sunshine Coast
WHILE our Central Queensland neighbours are experiencing a decline, the Coast’s rental market remains tighter than ever.
Latest Real Estate Institute of Queensland data revealed the Sunshine Coast vacancy rate had narrowed from 1.6% to 1.3% in September. Caloundra and Noosa entered the sub-1% region, with vacancy rates of a mere 0.9% – the lowest in the state.
Ray White Maroochydore director and auctioneer Dan Sowden said he expected vacancy rates to soften slightly towards the back end of this year and next, with some affordable housing projects coming online. This would mean some renters making the jump into property ownership.
“Some properties are always going to have exceedingly strong demand,” Mr Sowden said.
“If you’re paying a high amount of rent at the moment, it could be a good time to look at jumping into the property market.”
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.
Mr Sowden said he believed a rate of less than 2% was a workable figure for a region as it gave tenants the opportunity to view properties and made for a fair return on investment for vendors, creating a pretty fair market for all parties.
“The 5%-7% rate in Central Queensland is a very weak market, it’s in favour of the tenant,” he said.
The vacancy rate in Gladstone rose from 5.2% to 7.1% in September, further proof of the Coast’s position as one of the more sought-after locations.
“We’re very attractive at the moment,” Mr Sowden said.
“The next 10 years on the Coast are going to be very exciting.”
He said given the Coast’s counter-cyclical behaviour to southern states, with more housing projects arriving, southern homebuyers could begin to see the Coast as a viable alternative to trying to crack the massively inflated southern property markets.
“A lot of people don’t need to be in city centres to work now,” Mr Sowden said.
RBA Alerted on Heightened Level of Property Investment Risk
The RBA deputy governor Philip Lowe says recent measures from banking regulator, the Australian Prudential Regulation Authority (APRA) were having a “positive, albeit modest, effect”.
“In the past couple of weeks you’ve seen a number of banks say they’re requiring larger deposits for investor loans, they’re offering smaller discounts on interest rates and smaller rebates, they’re requiring higher serviceability levels,” Dr Lowe said at yesterday’s Thomson Reuters regulatory summit in Sydney. (more…)
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