Hervey Bay Gossip

The Queensland Premier announced today that the state government has just launched a campaign to return mnore than $2.5 million in unclaimed rental bonds to their rightful owners.

A new website has been launched that lists the names of people entitled to a refund of their bond payments and you can find that site at http://www.rta.qld.gov.au

At the same time landlords and tenants in Hervey Bay are entering an interesting period. The cost of buying and maintaining a house is increasing and so landlords want to continue to get a reasonable return on their investments. To do that they see the need to increase rents.

At the same time the general cost of living is rising for tenants too and many can not affort to pay increased rents.

And just to complicate matters the pool of good tenants is limited but the pool of houses available for rent is increasing and will increase even more in the coming months as various town house and unit developments come on the market.

At least one major real estate agent in town is trying to encourage landlords to look beyond their desire for increased returns and just be happy that they actually have tenants in their houses. Increased rents might look very attractive to landlords but empty rental properties can very quickly bring a landlord back to the harsh realities of life.

It’s fairly obvious as you drive around Hervey Bay that house sales continue to rise. Even houses that have been very slow to move are beginning to sprout ‘Sold’ signs.

At the same time the number of vacant rental properties seems to be increasing too as does the cost of renting them.

Despite a slump in new building approvals across the country this week seems to have seen a slight improvement in Hervey Bay real estate.

The number of ‘Sold’ signs appearing around town has certainly increased and not just at the lower end of the market either.

The Housing Industry Association has warned that housing activity in the residential sector is expected to slow during 2006 as people have less money to spend on renovations and the number of new houses decline.

What does that mean for us here in Hervey Bay?

The real estate market still seems to be over-saturated with houses and sales are obviously way down. Last Saturday two open houses in our street seemed to attract zero interest and it was sad that the house that had the most number of cars parked outside it was not for sale at all. Instead the owner and his family and friends were working on some extensions and the cars belonged to his helpers.

That’s hardly the headline that anyone who has been involved in a real estate purchase in the last two months wants to see but that’s the reality in Queensland today.

The Courier Mail is carrying a stoy today that reports that as many as 80% of real estate contracts signed in the last two months could be invalid because minor issues such as incorrect typeface size did not comply with the amended Property Agents and Motor Dealers Act

Yesterday the Hervey Bay Gossip reported that the Real Estate Institute of Queensland still sees Hervey Bay as a great place to invest in real estate.

After that story was posted I had a chance to speak to someone involved in the rental side of real estate here in Hervey Bay. Their appraisal of the situation is that it is becoming increasingly difficult to find tenants for all the rental properties in Hervey Bay and even more difficult to find good tenants.

As one commentator on yesterday’s story said:

It appears obvious (yet again) that anyone connected with real estate needs to perpetuate the hype!

The research manager for the Real Estate Institute of Queensland still sees Hervey Bay as a great place to invest in real estate and points to the fact that, in the year ending September 2005 rents increased by 10% to an average of $220.

There is no doubt that rents have increased but there is also no doubt that rental properties in Hervey Bay are standing empty for longer periods of time. Every agent that runs a rental book has plenty of rental properties to choose from.

Back in 2003 when the Hervey Bay Gossip crew moved to town finding a home to rent was difficult but that seems to have changed in the last 12 months and the situation is not getting any better as town house developments spring up in some of the older parts of town.

If you haven’t been out to the Hervey Bay hospital lately you will have missed the development of a new estate of Nissan Street.

At a time when the real estate industry is in the doldrums and there are a large number of unsold houses and units around Hervey Bay the last thing you would expect to see was yet another housing development but it’s there and the houses are on the market.

There is nothing under $308,000 and prices range up to $380,000. At those prices and in these market conditions I doubt they will sell like hot cakes.

The real estate market in Hervey Bay continues to drift along in the doldrums. Yesterday in our street we had two open houses and a on-site auction all at the same time and all within a radius of two hundred metres .

The number of cars parked in the area could have been counted on the fingers of one hand. The house for auction was a 15 year old two storey five bedroom house with inground pool on an 800 square metre block. The auctioneer opened the bidding at $428,000, quickly dropped it to $423,000 and then entered an auctioneer’s bid of $405,000 but never had a flicker of interest from anyone.

His claim that the vendors were prepared to meet the market was nice but the market wasn’t prepared to meet the vendors.

For some years now Hervey Bay has been one of the leading centres in Australia for population growth. Retirees have been coming here in droves to take advantage of the climate and the lifestyle.

Their migration has been financed by the sale of their homes in the major capitals, often at prices that were unimaginable when they first purchased those homes.

However that flood of people coming here may soon begin to wane according to new research by BIS Shrapnel. As the metropolitan property market begins to struggle more and more people are either keeping their homes or choosing to sell and move to less popular destinations.

The property market could fall by up to 10% over the next year and some economists suggest that it could go even lower. In the past such fluctuations have not impacted so heavily on regional growth centres like Hervey Bay but in recent years property prices here have risen to the point where prices are on a par with cities and so there is little financial gain in moving.

While that is bad news for Hervey Bay some inland areas are becoming more attractive and Toowoomba has recorded increasing residential construction figures over the last few months.