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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
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Hello and welcome to the Property Investors Handbook Podcast. I'm your host Adam Bell and today we're looking into the state of the rental market here in South East Queensland. Now joining us again is Colleen Sutherland, owner of Sutherland's Property Management Group, who brings years of experience and expertise into navigating the complexities of property management.
Now today we're going to talk through the current trends and forecasting, even talk about what's happened over the last, I guess, five years. where we've seen this massive change, especially here on the Gold Coast. And you know, what renters might be able to expect in the future.
Colleen, great to have you with us. Thank you so much, Adam. Now you've seen it all. You've been around, what is it? 30 odd years now. And have you ever seen a change as big as we've seen in, let's say about the last five years? No. I mean, I've seen changes. So when it's a buyer's market, it's a tenant's market.
When it's a seller's market, it's a landlord's market. So that's sort of how it goes. And it ebbs and flows every couple of years. It changes. The last four years has seen major changes to legislation and major changes to how the tenants pursue their tenancies and what they're looking for because of the changes.
Sure. Yeah. Sure. Cause I think this all the, the massive change here on the coast, probably I think, and again, I'm guessing you're the expert. Tell me here, but we saw some things that had never really happened quite in the numbers that they did. So COVID, came along. Yes. And that saw a massive increase of people wanting to move to, to Queensland and saw numbers, you know, escalate, go through the roof, which then saw a drop in stock available for renters to rent.
And I was hearing about, you know, at that time at the peak where you might be having a property inspection, sorry, uh, uh, an open house to look at properties for rent and be getting 40, 50, 60. That's correct. And, and it didn't slow down until probably late last year, the numbers slowed down. So if you've got something cheaper for rent, yes, of course, everybody's going to turn up for those.
But if you've got something higher and I'm talking higher, like six, 700, the numbers aren't quite there anymore. But, yes, you're correct, they were just, we used to have to just do it in two or three stages. Sure. Because there was too many people in the unit or the house or. Yeah, because, look at the time I was remembering hearing stories of where people just, you know, we were seeing people becoming homeless, literally, because they just couldn't get a place.
That's even more so now. But COVID did change the face of securing a tenancy and it's just ongoing and it's ever changing. So that it's like shifting sands. So at the start of COVID, we had to go immediately into the emergency response legislation. And in that included the tenants can ask for a rent reduction, reduced rent, or.
So that was really quite difficult to navigate at the time because we had to get them to fill out an application to say who was eligible and who sort of taking advantage. And because of the incentives that the tenants were being paid, Not many of them in my rent role met that criteria. Right. So yeah.
And so it went on from there. Sure. And what would you say from, you know, from the beginning of COVID to now, cause I think rents are still on the increase if I'm right, that they haven't quite peaked just yet, close to, but what would you say that the. The percentage increase from the start of COVID to now has been it.
I'm going to say maybe 40%. That's a good question. I'm going to say probably 30 to 40%. Which is huge when you're talking about rents that started at say, let's say. You know four five hundred and now up, you know, six seven eight hundred. Yes, that's correct Yeah, so and and when the rents went up we used to put them up, you know, maybe 25 depending on the market which was fairly consistent Pre 2020.
But now rents are going up like a hundred dollars a week. And that's just, who can all of a sudden find a hundred bucks a week? Well, look, this is something I've wanted to talk to you about for a while because I have been a renter during that period. And this is what I've seen. I was used to my 10, 15, maybe 20 increase.
Most, you know, lease renewals, you expect it. And then suddenly last two to three. 100, 80, 80. I'm going to say four years. You've had 80 increase. Wow. We had to just put one up 100 a week and they were an elderly couple. They had to move but they did struggle to find something that they could afford. Yeah, see that's the problem for people.
Renters, isn't it? Yes. For tenants. You get the increase, you can't afford it, but guess what? You've got to then go to the market and that's all moving at the same time anyway. You're moving into somewhere that's being re leased. It's probably just been increased as well. More than likely, but then there's the cost of moving.
So that's not cheap. If you really add it all up, because you've got to pack the boxes, move the boxes. And all your furniture, you've got to clean the place that you're moving out of, you know, maybe paying double rents. You've got to really weigh up what it's going to cost to move. And I'm not just saying that to say, Oh, stay where you are.
I'm saying that as in really evaluate how much the overall cost will be. From house A to house B. Yep. Yeah. And look, this isn't going away, is it? Now that we've had this 30, 40, 50 percent increase over this time, I'm guessing it hasn't quite peaked. Let me change the question to start with and I'll come back to that.
But where do you believe the peak is? Where, when is it going to peak? slow back down to, you know, 5 percent increase per, per tenancy. So you've got contributing factors outside the landlord being greedy. And those contributing factors are the interest rates on their mortgages and The cost of rates, and I'm not sure if you know how rates work, but they rate work on valuation.
the property goes up, so do the rates. Water is going up like concrete. It's ridiculously expensive. I think Queensland has the most expensive water in Australia. Then you've got the cost of insurance. And that is just, uh, crazy in itself. And so what landlords are doing is increasing their excess to decrease their premium.
Yet, when it comes time to making a claim, Oh, you've got a 2, 000 excess and it's like, Oh. There's so many factors at play, isn't it? And you know, I, I feel for tenants, and I've been one of these who've hit, had these rate increase the, you know, the rent increases, but like you've just explained that maybe tenants don't think of, all of the costs for landlords are increasing as well.
And it is a business. You are there. You need to, there's no point having. a property to be able to rent if you're not making something from it. Yes. And there's so many factors at play that people just need to understand, you know, it's what makes the world work. We need to have investment properties in order for people to be able to rent.
Yes, correct. And I think the market is swaying more and more to the private investor than the public sector. And that in is quite alarming because as interest rates and things change, the landlord may not, just not be able to hold it and go, no, I'm out. So when he does that, there goes another rental property for an investor, for a tenant.
Which again, then brings in the forces of supply and demand, which, so. It's just because I guess another part to all of this, especially here in Southeast Queensland, there just hasn't been enough development, has there? There's not enough new properties coming on. I don't know about that because the coastline of the Gold Coast to me, and because I drive in that traffic every day, besides all that's going on on the roads, I feel that there's There's an overdevelopment of units.
You do? Yeah, I do. And then when the units hit the market, either for rent or for sale, they're extraordinary prices. They're eye watering that most tenants can't afford or can't fit in. Because they're getting smaller and smaller, isn't it? Yeah. So, yeah, there's a lot of contributing factors that create the base of the rent.
And then what goes on top of that is often, you know, the profit that the landlord will get. Do you see much of a change in the rental market and the forces between, say, units, high rises, all types of units versus houses? I used to, but I don't anymore. It's just, yeah, uniform. Yeah. You know, you've got advantages and disadvantages of both living in a house or living in a unit.
And then the unit you've got to be able to fit in. But at the moment across the board, the rents are extraordinarily high. Sure. I find that it's like, and when we're looking at the rental appraisals, it's like, how much, so I feel sorry for tenants at times. Oh, absolutely. Investors with the rents having gone up this much over this period of time, has the yield gone up for.
Property owners or is it still Uh, no. It, it has, we've talked, we've talked it ha it must have a little bit, at least even with costs rising. Yes, it has. It has and it is still good an investment to have. Yep. Bricks and mortar are always make a good investment. No, but then you have to be able to be prepared that if you've got your interest at this rate.
You need to be able to afford it because if that interest goes up, you still only getting this much money a week. So you need to factor in change. Of course. So what advice do you have to renters and in this particular market that it's still rising? We've seen, People are just having to move further out, aren't they?
They do to cheaper areas and live in not so, you know, take their second, third, fourth preference on where they, I know might wanna be in order to be able to, to afford it. And that's where a lot of the housing development is. It's out that way and it's out west and it is, it can be considerably cheaper than the Gold Coast.
However, you've got a Costa in the fact of driving to work if you're not a, got a home work from home. Job, so yeah, there's swings and roundabouts and everything. Six of one, half a dozen of the other. I mean we now could Flow into a big, probably double the length of this episode on cost of living. I know, I know, it all Interrelates doesn't it?
And that's what we have to take into consideration When we're looking at applications. We have to take into consideration the cost of rents, cost of living Um, to affordability of rent. Sure, sure. Look, it's a definitely a big challenge for everybody out there with, you know, what's going on with this market.
But look, thank you so much, Colleen, for joining me today and a really, another very insightful episode. Now for our listeners looking to maximize their investment or learn more about effective property management strategies, please be sure to visit spmg. com. au for Colleen's got a wealth of knowledge there or give them a call, pop them an email.
We'd love to hear from you. So look, I'm Adam Bell. You've been listening to the Property Investors Handbook Podcast. Join us next time for more expert insights into the property investment world. Colleen, thanks so much again. You're very welcome.