Real Estate by Owner – High Executive Rental Vacancies
Privatepoint is the for sale by owner ( FSBO ) and DIY real estate sales website for private real estate sale in Australia.
It appears that executive rental apartments (real estate greater than around $800 pw) are increasingly becoming vacant and are sitting on the market vacant for extended periods of time. This isn’t good for real estate investors who have often paid premium dollar for these exclusive apartments in sort after suburbs of major cities across Australia.
To highlight this problem, I was down at a local real estate office yesterday in Bondi and noticed that 70% of their rental apartments displayed in their shop window were leased. Out of the 30% left, around 3/4 of the apartments available were priced over $800 pw. So cheaper apartments are moving quickly but expensive apartments are not.
Why is this? Because most of the tenants of these exclusive apartments are executives and obviously the economy is affecting the companies they work for and the salaries they are receiving. Is this a sign of a recession looming?
Comments
It is hard to understand why someone would pay so much in rent per week. This amounts to more than the average annual salary!
Micky
05.11.08
7:40 pm
More money than sense rings a bell……
T-Bone
06.11.08
7:41 pm
It would be worthwhile these people purchasing a property rather than paying over $52k a year in rent.
It would certainly pay to be a property owner in these suburbs when rent is flowing through the door, not sure i would want to be one now though.
Drew Burkinshaw
06.11.08
10:42 pm
But the cost of these properties would be ridiculously high. Many of the people who rent them either can’t get access to the finance or do not want the debt.
Trent Piccilo
08.11.08
10:07 am
I would imagine these properties would be plus $1 million more likely around $1.5 million minimum. That is quite a hefty mortgage to lock yourself in. The interest on that per year is likely to be more than the rent they need to pay.
T-Bone
09.11.08
8:09 am
Good point T-Bone.
That raises the questions as to how viable an investment it is purchasing a million dollar house and then renting it out if all you are getting is around $52k per year.
Doesn’t seem like much of a margin, especially given that in times like the moment the property could sit vacant for a period of time.
Trent Piccilo
10.11.08
6:45 am
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RODNEY
10.09.10
8:19 pm