Rents for Brisbane apartments have fallen by as much as 17 per cent over the past six months amid an unprecedented flood of unit developments on to the city’s market, according to one of Queensland’s biggest property managers.
Prominent agency owner Andrew Coronis, managing director of Coronis, which operates 23 offices across southeast Queensland, said tenants were moving more readily to get better deals, forcing existing unit stock and “investor-style” apartment owners to cut prices.
Brisbane’s market has suffered a sharp turnaround with a collapse in off-the-plan apartments to one-third of the level compared to last year and strain in the construction industry resulting in builder CMF Projects going into administration.
“We’re seeing a 17 per cent drop in rents and it is happening right now,” Mr Coronis said. “It is between 10 (per cent) and 17 (per cent). Everybody is scrambling to lock tenants down.”
Mr Coronis said gave the example of an older sixpack style unit block in suburban Chermside where previous rental income was about $420-$430 and would now attract between $350 and $360 a week.
Coronis agencies manage more than 8000 properties from the Gold Coast to the Sunshine Coast. Mr Coronis stressed that he was bullish about the long-term prospects of the Brisbane market and said the major oversupply would resolve over the next two to three years. He said high-quality apartments continued to attract strong interest and rents.
The warning comes after Real Estate Institute of Queensland figures showed the official vacancy rate in inner Brisbane was 4.4 per cent, the highest proportion since the global financial crisis. The previous peak was 4.1 per cent in the December quarter of 2013.
Across the wider Brisbane area, the vacancy was 3 per cent, down from the September-quarter peak of 3.3 per cent. The Brisbane city centre vacancy rate was 3.7 per cent.
A report from Place Advisory released this month showed Brisbane’s off-the-plan sales have fallen to the lowest level since June 2011. Last quarter there were 272 unconditional transactions, a 13.7 per cent drop since the previous quarter.
Mr Coronis said the uptake of investors in the new-build sector in the city’s unprecedented apartment-development rush over the past three years had led to fewer investors scoping the market.
But he said there were no more distressed sales than usual because people continued to extract a reasonable yield in the low interest rate environment.
“The benefit for the community is the affordability,” he said. “Until the surplus gets taken up it will be a great time for renters.”
The changing market dynamics have spurred Coronis to change its approach to property management, placing a greater emphasis on assisting tenants through the rental process.
Originally Published: http://www.theaustralian.com.au/
How to Manage an Airbnb Property: 4 Expert-Approved Tips
Being an Airbnb property manager can be a rewarding and lucrative career path. Because the short-term rental industry is constantly growing, now is an excellent time to delve even deeper into property management. It is a low-risk, low-investment venture with enormous potential for profit.
What Does It Take To Become an Airbnb Property Manager?
Even though this can be a highly lucrative career path, it is far from easy. To become an Airbnb property manager, you don’t really need a degree or a special qualification. You must, however, be ready to put in the necessary effort, like establishing a good relationship with property owners, booking confirmation, guest communication, scheduling routine maintenance work, managing check-ins, and check-outs, and listing properties on Airbnb and other renting platforms.
How Much Can an Airbnb Property Manager Earn Annually?
Being an Airbnb manager can be very lucrative. The average annual salary can range from $36,000 to $94,000. On an hourly basis, one could earn between $18 to $45 per hour depending on your skills and dedication.
Expert-Approved Tips to Manage an Airbnb Property Successfully
One of the reasons why many people rent an Airbnb property is that it is less expensive than booking a hotel room. Setting a reasonable price for the listing can also increase the likelihood that guests will leave a positive review. This will produce a stimulating effect, which is essential to the successful management of a property.
While having a good list is important, it is not sufficient. In order to compete with others in the industry, Airbnb property managers must actively advertise their Airbnb properties. Using cross-channel marketing is one of the most effective ways to reach more people. Make sure to list your assets on rental sites other than Airbnb. This will significantly increase public awareness and generate more inquiries.
Airbnb property managers must also take advantage of email campaigns. Even when business is slow, this strategy is able to boost occupancy by reaching out to former customers and providing special discounts for them.
Outsourcing to Other Property Managers
Being a manager does not imply that you must do everything yourself. Outsourcing ensures that work is completed even if you are not present to supervise it. You may be too busy to manage your own listing while also trying to figure out how to find a great Airbnb property manager who provides quality short-term rental management services. You should select and collaborate with service providers who are renowned for their adaptability, dependability, and overall knowledge of the Airbnb business. You are more likely to receive a high rating from property management clients if such tasks are completed professionally.
Renting out a property on Airbnb requires a significant time commitment in order to be successful. Make plans to devote some time to the job every day. Getting a spot on Airbnb requires communication with the host. To reduce the number of time guests spend waiting, you must pay attention to updates and be ready to react at any moment.
The short-term rental market has changed a lot because of Airbnb. Operating an Airbnb property can often provide extra income for hosts, and for those with multiple listings, it can bring in huge annual revenue. Airbnb can also allow property owners and investors to benefit from its wide platform in a variety of other ways. Indeed, this is one business that will not go out of demand for a long time.
Property cheat sheet: three ways the market has tipped in buyers’ favour
In real estate, the word on the street about the market is as compelling as crunchy data.
“I think this area is on the up”; “My niece scored a bargain there”; “I heard he sold it for less than he wanted…”.
The general vibe in the industry right now is this – the upper hand has switched from sellers, who were riding high prices in a hot market, to buyers, who now have the chance to score a property they love within budget, taking their time and enjoying more choice.
And we have the numbers to back that sentiment up.
These are three sets of digits that prove the advantage in the market is now tipping the way of buyers.
Listings are up
More choice of properties for sale means less competition among buyers.
When buyers have greater options, it water downs FOMO and the urge to fight (read: keep on bidding and pay more than your opposition) to win the keys.
Right now, Canberra buyers have a bigger boost in options than anyone in Australia. Listings in the capital have increased almost 20 per cent in the month to March (according to data from the most recent Domain House Price Report, which is crunched quarterly).
Adelaide has had the second biggest jump in listings, followed by Perth.
Canberra: Listings up 19.8 per cent (monthly change)
Sydney: Up 14 per cent
Darwin: Up 16.7 per cent
Gold Coast: Up 13.6 per cent
Brisbane: Up 12.4 per cent
Adelaide: Up 18.5 per cent
Hobart: Up 16 per cent
Melbourne: Up 15.9 per cent
Perth: Up 17.8 per cent
Clearance rates are down
Clearance rates are still one of the best measures of market performance. The figures reveal how many properties sold that week from those on offer.
In Melbourne, there are two big games in town – auctions and AFL. Melbourne is known as the auction capital of Australia. It’s a popular method of sale and a weekend pastime.
Clearance rates in Melbourne crept upwards between February and March – landing in mid-60s – but are much lower than clearance rates at same time last year (March 2021) and the summer market that closed out the year, where they hit the early to mid-70s.
In Sydney, the clearance rate continues to clock in below 70 per cent (for five months in a row), which suggests a cooling market, according to Domain’s research team.
Canberra’s clearance rate is almost 10 per cent lower than the same time last year, and are sitting a little bit below the 80 per cent-plus clearance rates that defined 2021.
Properties are taking longer to sell
The average number of days that houses are on the market has increased in some capital cities between February and March.
Buyers are biding their time and haggling harder, resulting in some homes remaining on the market for longer in Melbourne, Sydney, Canberra, Brisbane, Darwin, Hobart and Perth.
Only in Adelaide are houses selling ever-so slightly faster than the previous month.
In Melbourne, houses are on the market for a week longer, and it has skipped out by six days for Sydney and the ACT.
Domain measures days on market for private treaty listings (properties going auction have a set campaign of three or four weeks, but private listings linger until a buyer strikes at an acceptable price).
Buyers will see expressions of interest, private sale or even simply “contact agent” on private treaty ads, which means pick up the phone and start negotiating.
Canberra: March, 48 days on market; February, 42 days on market
Sydney: March, 46 days on market; February, 40 days on market
Darwin: March, 108 days on market; February 107 days on market
Brisbane: March, 37 days on market; February 35 days on market
Adelaide: March, 65 days on market; February 68 days on market
Hobart: March, 31 days on market; February 26 days on market
Melbourne: March, 52 days on market; February 45 days on market
Perth: March 61 days on market, February 65 days on market
Article source: www.nine.com.au
Office Upside Lures Institutional Investors
Institutional investors are being lured back to the office sector with strong market yields on offer, according to the head of a $390-million urban wealth fund.
City of Brisbane Investment Corporation chief executive Kirsty Rourke says she is confident in the resilience of Australia’s office market after splashing more than $70 million on an office block in Canberra recently.
But she says putting a foot on something that stacks up financially is difficult in the current climate, as institutional investors and foreign money floods the market.
“We’ve been looking at Canberra for about two years now, but there hadn’t been much activity for a while,” Rourke says.
“It was difficult to find an asset that we thought provided value—the yields can be quite low.
“We acquired 33 Allara Street on a 5.63 per cent market yield with a good mix of tenants. About 55 per cent of the tenants are government or listed companies.
“Part of the reason we were attracted to the Allara Street office was the office vacancy rate of 6.1 per cent in Canberra. It represents good value compared to the other major capital markets over five to 10 years.”
It is the wealth fund’s first acquisition in the nation’s capital, which was largely untested and resilient in the face of the pandemic. The fully refurbished, 9736 sqm A-grade office building at 33 Allara Street is on a prominent 3725sq m site in the CBD’s City East precinct.
A JLL report has revealed Canberra’s office market has recorded a fourth sucessive quarter of positive net absorption in the first quarter of 2022. Canberra’s headline vacancy rate in the office sector is now at 5.5 per cent, compared to a national average of 13.5 per cent, while its prime vacancy rate of 2.8 per cent is the lowest in the country.
Rourke, a former property lawyer, shifted gears in 2014 to go behind the deal-making and drive Brisbane City Council’s investment arm, steering its $390-million portfolio through some choppy water over the past few years to deliver a 17.8 per cent return last financial year.
The fund has been recycling assets to unlock money and acquire new properties to realise the upside. Rourke says the fund’s sweet spot is assets between $20 million and $80 million, and she says they are “assessing those opportunities as they come across our desk”.
CBIC also has office assets in Gosford and Parramatta. Rourke said the Parramatta office asset had been “challenged by Covid” and extended lockdowns but said there was still “strong bidding activity for assets” in Sydney’s growing Parramatta CBD.
“There’s still a strong level of demand. I think we haven’t seen the impacts play out in office demand yet though,” Rourke says.
“People are still figuring out how to go back to the office and what their requirements are. I don’t think organisations have fully got their head around their workplace strategies. They still want one day where everyone is in the office, but how do you accommodate those people.”
The Parramatta office block at 9 George Street is part of a repositioning play Rourke says they plan to employ with older buildings to boost their ESG value and future-proof the asset.
“You’ve got to ensure your building doesn’t become obsolete, it’s critical to invest in ESG,” she says.
“Where an asset doesn’t have at least a 4.5 Nabers rating we look at the capex required to get it there. That program doesn’t preclude us from looking at these assets.
“Reducing consumption costs gives you a good level of control of your asset, and tenants are also starting to demand it.”
While CBIC has been focused on increasing exposure in other states across Australia, Rourke says Brisbane remains an appealing market to invest in, particularly with the 2032 Olympics on the horizon.
She says the portfolio’s weighting was skewed to office at the moment but they were looking to increase their exposure to industrial. A tough ask in the current climate, with yield compression and a high level of institutional capital floating around.
“We don’t see value at 3 per cent, that makes it a challenge to meet our return objectives. We have an industrial asset on the Australian Trade Coast, but it’s a highly competitive market right now.”
Rourke says they are looking to acquire smaller industrial assets with a view to amalgamating sites.
CBIC also has two development sites for specialist disability housing in East Brisbane and Everton Park, which it is looking to develop.
Article Source: www.theurbandeveloper.com
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