Darwin landlords urged to move early to keep quality tenants
With vacancy rates plateauing at about 5.5%, landlords are being urged to pay attention to quality tenants to safeguard them against an empty property this wet season.
“The reality is that there is still a surplus of 1,200 rental properties in the Darwin market, the same figure as 6-8 months ago,” said Glenn Grantham, General Manager, Raine & Horne Darwin.
“The market is levelling out with virtually the same amount of new tenants and new rental properties hitting the market every month.”
Raine & Horne Darwin, for example, is averaging 20 new managements a month and 20 new leases.
“We have consistently had about 25 vacant properties at the end of each month for the past six months. Yet we’ve been putting on 20 new managements and leasing around the same number of rental properties. This means we have a lively rental market, but the new activity isn’t eating into the surplus – it’s a zero sum game,” said Mr Grantham.
With the Darwin investment market in a holding pattern, Mr Grantham warns that the duty is on landlords to be sensible about their weekly rental expectations.
“If you are putting the property into the rental market for the first time, you need to be realistic about the asking price. This means listening to your property manager and checking out online what similar properties are leasing for,” said Mr Grantham.
“If you don’t listen to the market, you’ll be an investor without an income.”
For landlords who are facing the end of a lease, Mr Grantham advises them to approach their tenant before they test the market.
“If you have a tenant who is looking after the property and paying the rent on time, approach them immediately with some carrots, such as a discount on their current weekly rent, to ensure they stay put.
“Don’t try and convince them to stay after they have decided to move on. By then it will be too late.”
The strongest rental markets continue to be in the housing markets in the northern suburbs of Darwin such as Milner, Jingili and Moil, where yields of 5.5% are still possible and vacancy rates are below the Darwin average.
“There are 350 two bedroom apartments sitting vacant in Darwin, so this market still has some way to go” said Mr Grantham.
Here we are back again.
These little sections are getting some great traction for the Darwin Real estate Market with our recent update that included Lenny Holt being picked up in the NT News.
Clearly people like hearing what is really happening at the ‘coalface’.
Sean is just into his 2nd year in the Darwin market as a Sales Representative and doing extremely well. He will let you know what he is experiencing out there on the weekends.
Shannon is one of our superstars who joined the Company just over 2 years ago and is working her way up the ladder to be a Portfolio Property manager. She will be talking to us about what is happening in the rental market.
Hope you enjoy.
This is a Market Update with a Property Management Spin and a bit of a Tasmanian feel to it also……diversifying!
I had the pleasure of talking with Ilyse Elphick, Assistant General Manager of Raine & Horne Darwin and Tony Easther, General Manager of Raine & Horne Kingston, Tasmania.
Take a look.
The Darwin property market is enjoying a happy new year, according to Glenn Grantham, General Manager of Raine & Horne Darwin.
“The sales and rentals markets are producing very healthy numbers for this time of year. We’ve already listed 20 new properties for sale and picked up 25 new property managements,” said Mr Grantham.
“The Darwin real estate market doesn’t tend to click into gear until after Australia Day, yet prior to the national holiday we’d sold 15 properties making this one of the most active Januarys in about a decade.”
The start of the development phase at Ichthys Inpex[i] LNG project is critical to the surge in real estate activity, according to Mr Grantham.
“As part of this phase, the oil producer is employing specialist engineers and technicians to support its operations and Darwin is getting its fair share of new recruits,” said Mr Grantham.
“We’ve seen plenty of Inpex workers at open homes seeking high-end tenancies priced between $700 and $1,200 week, while those considering a property purchase are most active in the $500,000 to $700,000 price range.”
For example, a 3-bedroom house at 4 Arthur Street, Alawa recently listed for $579,000 with Raine & Horne Darwin and is already attracting buyer attention according to Mr Grantham.
“Boasting old-world charm with modern additions, including undercover parking for four cars, this is a most desirable home situated on a quiet street in the sought after Alawa Precinct.
“It’s a an easy walk to local shopping centre, schools, Charles Darwin University, and Casuarina Square, which is sure to attract investors and aspiring owner-occupiers alike.”
“The market prior to Christmas was a bit sluggish and many vendors shelved their selling plans in frustration.
“However Darwin is a small market compared to Sydney and Melbourne and its dynamics can change very quickly.
“The next phase of the Inpex project is a perfect example of how quickly the demand for real estate can surge in Darwin, creating improved market conditions for vendors to relist their properties for sale.”
Well we told you it was coming and here it is!!!!
The Darwin Rental Market is ridiculously superheated and climbing faster than we could ever expect……we already have the highest median rental price for an Australian Capital City as at the end of June and this example will show you what to expect in the very near future.In May we rented one of my personal investment properties located at 11/12 Brewery Pl, Woolner for $650/week. This is a fully furnished 3 bedroom, 2 bathroom apartment with water views from the balcony!
This week…..not quite 3 months later we rented my mother’s property located in the same complex at 14/12 Brewery Pl, Woolner. This is a 2 bedroom, 2 bathroom facing in the opposite direction with no views…….The price was $650/week.
In discussion with my Property Manager I spoke about the level of enquiry and also what she felt my 3 bedroom apartment would achieve today…..she said I would have no trouble getting $750/week however she thought more like $800.
To put that in perspective we are talking a 15% to 23% increase on top of ‘Australia’s highest median rentals’ ……… IN 3 MONTHS!!! At that rate they could be double by June next year!!!
I don’t need to tell you what that will do to property prices do I?
We are currently selling 2 bed, 2 bath CBD Apartments ‘Off the Plan’ for $450K……what are they going to be worth by the time you would settle on one if they are getting rental returns in the vicinity of $800 – $1000/week….You do the Math and then contact Byron Wauchope on 0424 181 530 before you miss the boat! (And there will be less of them arriving here now we have the immigration policy sorted to Little Johnny Howard’s policy! But that is a whole different story for a different time)
Now the first thing I was ever taught in relation to negotiation is ‘negotiate from a position of strength’ however this seems to be a rule lost on some tenants in Darwin if today’s NT News article is to be considered.
Let me paint the picture for you…..The current rental market in Darwin is running at a Vacancy rate of 0.4%. The economy is heading toward BOOM driven by the Resource Projects coming to town….One of which is INPEX at a staggering $34 Billion! Every second day there is an article run in the paper declaring rental prices are going UP as Companies and workers arrive!
Now let’s consider the family standing at the front of the home they were renting wondering how it could have happened that they are having to move.
The first question to answer is why were they not offered the property at an increased rent…..Well I do not think you need to be Nostradamus to work out that the owner probably didn’t want them there anymore!
But hang on…..they didn’t even get the chance to be offered the opportunity to rent the property at an increased rent?? Again…the owner clearly didn’t want them there anymore……and more importantly ‘It is easy for the owner to find a replacement tenant’ quickly and with no loss of income……in fact a considerable increase!
So the real story is ‘Why didn’t the owner want them there?’…..not that rents are going up…..we all know that and have been repeatedly advised for the last 6 months via the same paper.
Now I do not know these people and I am just hazarding a guess but logic would say that they may not have been the ideal tenants…..perhaps it was timely payment, perhaps the way they kept the property, perhaps the way they may or may not have co-operated with the Agent….the list could be a mile long??? I could be a mile out and they are the ideal tenants……????
So this is where I ask the question of tenants in Darwin…..Are we really that stupid to think that Landlords who can get increases in rents to the tune of $100, $200 and more per week are going to want to keep a troublesome tenant in place? You want to keep your rents down….Let’s start by impressing your Landlords with the way you keep their home and being cooperative or you will find yourself on the open market and that isn’t very desirable at the moment.
Negotiate from a position of strength!
Last Thursday night Raine & Horne Darwin conducted their Quarterly Awards for the Jan – March quarter 2012.
There were some stunning results awarded on the evening with Lenny Holt receiving his first ever ‘Platinum’ Sales Award. This was an amazing achievement placing him at the top of his field for performance.Our new Leasing Consultant, Violet Krishna has been filling almost every rental property with quality tenants as soon as they become available. Her efforts over the last quarter have not gone un-noticed and as such she became the proud recipient of her first ever Award. We hope that it is the first of many with Raine & Horne.For any of our clients who have been lucky enough to talk or meet our new receptionist Natasha Bland they will be quick to agree that her personality is not reflected by her surname. Natasha has injected enthusiasm and personality at the front desk of our Stuart park office and this was rewarded with her first trophy from the Company also.Finally we welcomed back Jess Retke after her recent maternity leave. She has reentered the Property management Department like she never had a break. Her work over the last quarter in maximizing the income for her owners whilst minimising the outstanding rents of tenants was immediately rewarded when she was named Property Manager of the Quarter.It was fantastic to see so many new faces receiving Awards on the evening combined with a few old stagers who are performing at the highest level.
Speaking of old stagers…..Carolyn Wilson was rewarded for her longevity of service to the Company receiving her 5 year service Award. Carolyn is one of the original team that started when Raine & Horne Darwin commenced in the NT.
Thank you to Chris Weston who travelled up from Adelaide to present the Awards. he is the smiley bloke on the right who has more grey wool on his head than an unsheared merino….the good looking bloke on the left is me!!!