Where rents are on the rise in Townsville

Rents are on the rise across many of Townsville’s house and unit markets, with suburbs seeing increases of as low as $2 and as much as $60 a week.

The latest REA Market Trends (January) report shows that annual median rents for houses have risen across 21 suburbs, while median rents for units have increased in four suburbs.

It comes as the city continues to grapple with record low vacancy rates, with the latest Real Estate Institute of Queensland (REIQ) Residential Vacancy Report putting the city’s vacancy rate at 0.7 per cent, a slight improvement on the 0.6 per cent recorded in the September quarter.

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The realestate.com.au data shows that rents in Castle Hill, Townsville’s most expensive suburb, rose from $665 in November to $725 in January.

Houses in Belgian Gardens, which has a sought-after school and is in a central location, saw similar rent rises, increasing from $425 in November to $478 in December, and remaining at $478 for January.

In North Ward, another aspirational suburb, rents rose from $415 in November to $430 in January.

Other suburbs to see rent increases included suburbs in coveted school catchments including Pimlico, Hermit Park, Mundingburra, Aitkenvale and Currajong.

Some of the city’s more affordable suburbs to buy, such as Kelso, Condon, Currajong, Cranbrook and Vincent, are also seeing price increases.

In Condon, which has a median house value of $255,000, rents have risen by an average of $20 a week, the data shows.

Ray White’s Julie Mahoney said she was not surprised to see rents increasing across the city.

She said landlords were finally starting to see returns on their investment after many years of losses.

“We are seeing multiple applications for properties, up to 30 at a time, and renters trying to secure rentals by countering with higher offers,” she said.

Property records show that a house in Belgian Gardens, which commanded $520 a week in 2012 before falling sharply to just $400 a week in 2017, before rising to $470 a week in 2018 and 2019, is also seeing gains.

There, rents rose to $500 a week in January 2020 and it is now available for lease for $550 a week.

In Douglas, a house is currently listed for $450 a week, up from $395 in December 2018.

While the weekly rent for a fully furnished house in Townsville City has also increased, up from $525 when it was last advertised in November 2019 to $565 now.

Ms Mahoney said investors had “really struggled” over the past decade, with reduced rents, rising insurance and rates costs, higher vacancy rates and high unemployment having a significant impact on many investors, who are mostly “local ma and pa investors”.

“It is easy to think, oh those greedy landlords are increasing rents, but for many it is the first time in a long time that those properties have been positively geared,” she said, urging all levels of government to do more to encourage investment in the region.

“There is a big issue (with rental vacancies) in regional areas and more needs to be done to make it easier and most cost effective.”

John Gribbin of John Gribbin Realty, which has one of the city’s largest rent rolls, said that while rents were on the rise in some suburbs, in others they were “likely plateauing”.

“The biggest shortage is in houses and top quality apartments,” he said.

“And a lot of investment houses that had been rentals are being bought by renters wanting a place to live.

“Sure there are a lot of houses being built now thanks to the grants but our biggest problem is that bugger all was built over the past decade and we are suffering from that now.”

Mr Gribbin said the crippling cost of insurance was a “big impediment” to apartment investors and developers, and therefore the rental market, and urged the government to act.

“They have been talking about how to fix it for some time but it has gone beyond being just a talk fest,” he said.

Commenting on the small improvement in vacancies over the last quarter, Mr Gribbin said there was always movement over the festive season as people relocated for work.

But he warned that the slight increase in vacancies – just 0.1 per cent – was unlikely to ease further.

“I believe that by the next quarter, we will be back down to around 0.6 per cent,” he warned.

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WEEKLY RENT RISES
(HOUSES)

November 2020/January 2021

Castle Hill $665 – $725

Belgian Gardens $425 – $478

North Ward $415 – $430

Bohle Plains $390 – $400

Bushland Beach $390 – $395

Douglas $380 – $390

Burdell $380 – $390

Mount Louisa $380 – $390

South Townsville $359 – $360

Hyde Park $320 – $350

Pimlico $330 – $350

Mundingburra $348 – $350

Vincent $328 – $345

Thuringowa Central $335 – $345

Deeragun $330 – $340

Aitkenvale $338 – $340

Condon $320 – $340

Hermit Park $330 – $340

Cranbrook $330 – $340

Currajong $320 – $340

Kelso $310 – $320

(UNITS)

South Townsville $360 – $370

Douglas $343 – $350

North Ward $310 – $315

Kirwan $260 – $275

(Source: REA Market Trends November 2020 and January 2021 reports)

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