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Sign a lease, and get a free TV or an iPad. How about a $500 gift voucher, two weeks' free rent? Or, a free gym membership?
These are just some of the out-of-the-box incentives agents are offering renters in south-east Queensland to get them to sign a lease. The rental vacancy rate within five kilometres of Brisbane's CBD has reached a record 4.4 per cent, driven by a glut of apartments. It is pushing rents down, some slashed by an estimated 10 to 15 per cent.
Up to 60 new apartment blocks were built in inner Brisbane in 2015, but the wave is waning this year, which means the downward pressure on rents is estimated to ease within two years.
Real Estate Institute of Queensland (REIQ) chief Antonia Mercorella expected the current rental slow down, given the higher-than-normal apartment builds. "But our view is this will be short term, with the oversupply being absorbed and stable rents returning," Ms Mercorella said. For the time being, renters are in the driving seat, particularly within 5km of the city centre, where there is a plethora of choice. "We've seen free laptops; rent reductions, and even in some cases landlords are assisting with removal costs," Ms Mercorella said. "What renters really need to do is ask the question, look around, do your research to see what is available. "Feel free to negotiate, as hard as you can. "It won't be forever, so they should grab the opportunity while it is there."
A three-bedroom Queenslander at Paddington that has been empty for three months at $600 a week. It had been going for $650. Tenants only swooped after it was advertised that the landlord dropped the rent to $580.
Owners are competing with flashy units, where the rent is the same, but they get pools, spas and saunas. A lot of tenants are actually offering a considerable amount less ... up to $50. That is a real shock to some owners Freebies are a common scene while trawling the internet for a new rental.
High-rise units at Hamilton, in Brisbane's inner-north, are going with one to two weeks' free rent. $500 gift vouchers are being offered to entice renters in some instances. It was a hard hit, but dropping the rent from $580 a week to $495 a week also stung.
Vacancy rates outside the 5km CBD radius sit at 3.7 per cent, which is considered healthy by the REIQ. Nevertheless, outer suburbs are not immune to the price drops.
Another property, in Inala has gone from $350 to $320, after a tenant broke their lease.
It is tough time at the moment but I don't think it is dire straits, it is just the new norm. I don't think we are going to crash and burn from here
Property analyst Urbis said in 2015 there were up to 60 apartment blocks built. But, over the next six months only about 10 are due to open their doors. Banks tighten credit, developers are suspending or withdrawing projects.
Investors are driving the sales in some apartment blocks, making up to 80 per cent of the purchases in some cases. National Property Research Company's Matthew Gross has crunched the numbers and said some rents have dropped 10 to 15 per cent across the south-east in general. He said the older apartments are struggling to compete against the newer ones, within the 5-to-10 kilometre city zone. "But at the end of the day properties are still filling up," he said.
In the meantime some prospective tenants continue to name their own price.