Rental property competition
Mon 17 March 2008
Dave Keevers, Bachelor of Journalism
Sunshine Coast residents are finding it difficult to live the Australian dream of home ownership while competition for rental properties increases.
With 12 consecutive interest rate rises since May 2002, and another rise likely, potential Sunshine Coast home buyers are being forced into the rental market.
Mooloolaba property manager Di Nicol said there is a real supply demand problem which, when coupled with increased interest rates and living expenses, is forcing people into the rental market.
“There has been a big change over the last seven years ... now, for every (rental) property there are probably 30 people who apply,” Mrs Nicol said.
Mrs Nicol said that competition is so fierce that some rental vacancies had been filled within two hours. Her monthly vacancy rate is 0.5 per cent. 
Most competition is for properties in the $400 per week price range while areas close to schools and other services are also very popular.
With prices increasing along the coast people are being forced to seek properties further away.
There has been a significant increase in the cost of rentals in areas like the Nambour Hinterlands as people cannot afford to live on the coast anymore, Mrs Nicol said.
Managing director of Live Now financial services Dahl Drew agrees that problem is one of supply and demand, with the shortage of properties and interest rates driving prices up.
The increase in the cost of living has not been reflected by an increase in wages and this is being felt on the Sunshine Coast.
“The Sunshine Coast isn’t blessed with the income of Sydney and Brisbane but the rentals are still very expensive ... sometimes 50 per cent of an income,” Mr Drew said.
The competition for rental properties is very serious with property managers holding open homes for rental properties whilst open bidding is occurring at others.
“Pressure on local tradesmen from the mines is fuelling the accommodation problem on the coast,” Mr Drew said.
Further competition for Sunshine Coast rental properties is coming from migrants from the United Kingdom and New Zealand, Mrs Nicol said.
Not only are tenants on the Sunshine Coast suffering, land lords are as well.
Land-lords are looking to recoup some of the additional costs but are limited by market value so they sometimes suffer more than the tenants.
With the increase in living expenses and pressure on the rental market tenants need to be careful not to fall behind with payments.
“The golden rule is not to fall into arrears, and if they do they need to communicate to the property manager,” Mrs Nicol said.
Mrs Nicol also warns against share rentals to make up any shortfall as it is a way for people with bad rental and financial history to find accommodation.
People need to structure cash flow like a business, monitoring cash flow and expenses,” Mr Drew said.
Tenants also fall into trouble by entering into leases and mortgages they cannot afford, wanting too much too soon, Mrs Nicol said.
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