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Residex on WA

Discussion in 'Real Estate' started by Jacque, 19th Jun, 2007.

  1. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    And for those of you in Australia's most isolated capital city:

    Further West, we are likely to see rents substantially increase in Western Australia over the next 12 months as rental yields and weekly dollar rentals catch up to other capital city markets. We expect weekly rents to increase in Perth by up to $100 over the next year due to the continuing high demand for housing. Renters in this city certainly have the capacity to meet the rising cost as Western Australia currently has the highest weekly earnings of any state. Most other rental markets remain tight and returns should increase but not to the same levels as Perth.

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    Looks like it's continuing good news for landlords in WA's golden city. Will be interesting to see if this extends to the regional areas as well.
     
  2. KevinH

    KevinH Well-Known Member

    Joined:
    6th Nov, 2005
    Posts:
    101
    About time Jacque,
    Yield have always been historically lower from my understanding, and this catch up will just bring them back to where they were prior to the boom ( yield wise).
    Problem is that there is still a mentality with the tenants and property managers that they are expecting landlords to supply quality ( usually new) housing at rental levels that effectively subsidises their lifestyle.
    eg...high expectations to what they are entitled to but don't want to pay a fair cost for it.

    One unfortunate side effect of all this is that many are not participating or benefitting from this ongoing boom, and they are getting marginalised by the increased costs of living in Perth.
    I believe there is a rental crisis approaching.

    As far as regionals go, I think it is flowing out but once again, depends on which regional centres.
    The ones tied to mining activity are priced to an extent that makes Perth look cheap in both rents and property values.

    Its getting hard to justify the cost of a block of 'desert' in remote WA that is more expensive than blocks in Perth.

    KEvin
     
  3. thinkbig

    thinkbig Member

    Joined:
    10th Sep, 2006
    Posts:
    16
    Location:
    Perth, WA
    I wonder if this will give us an opportunity to put pressure on managing agents to drop their fees. Part of the justification for the high management % has been the low rents. With rents rising maybe its time for a correction in the management market.

    I won't hold my breath waiting :D
     
  4. KevinH

    KevinH Well-Known Member

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    6th Nov, 2005
    Posts:
    101
    In a word....'NEGOTIATE"
    All fees are negotiable.
    If you don't ask the question you won't find out if they are or are not agreeable to a lower fee.

    I have always asked various PMs' why they charge what they do while rates appear to be lower over east, and none of them has come up with a valid reply.
    Probably coz they haven't thought about it themselves.

    If you persist, you will eventually find one that is receptive to a lower mgmt fee.
     
  5. Chris.R_WA

    Chris.R_WA Well-Known Member

    Joined:
    7th Aug, 2006
    Posts:
    113
    Location:
    Perth, WA
    Just as an aside, what mngt fee would most consider "reasonable"? (Given that the performance is of an acceptable standard).

    I have just signed a PM to one of my IP's at 7.73% + GST...I think this is not too bad, but have heard of others paying a fair bit less (and more too)...

    Just curious...

    Chris