Here on the Sunshine Coast, Qld rental prices are soaring. But why is that, and what can locals do for it affordable?
The Sunshine Coast Qld has always been famous for people to move to. For some time, the rental market has always been in demand, but recently things have dramatically changed. The rental market is now bonkers. Totally.
RENTAL PRICES ON THE SUNSHINE COAST IN 2021
So how much have rents been going up? So far, our most considerable rental increase was an additional $400 a week. But most are around $75 per week. Recently we advertised a property for $700 a week and had someone offer $1,000 a week to secure it. We also have people who contribute to pay 12 months in advance.
HOW HAS COVID AFFECTED RENTAL PRICES ON THE SUNSHINE COAST IN 2021
Covid has changed many things. One of these is significant corporations’ acceptance of allowing people to work remotely. Due to this, we are now seeing people from mainly Sydney & Melbourne moving to the Sunshine Coast Qld while still being employed on their hefty salaries. Big corporations are allowing reliable employees to work from home. Some even alternate from working from their home office on the Sunshine Coast to working in shared office spaces like the Hive in Maroochydore.
When Kath & I moved here from Sydney in 2005, we had spoken about it for years before moving. Covid has been the push for many people who wanted to move to the Sunshine Coast but didn’t feel ready for it yet. Now they almost had no choice. The Sunshine Coast is seen as a covid Safe Haven.
In addition to the push with people moving to the Sunshine Coast from interstate, it’s the old supply and demand issues, where right now there is no more land, so new properties just can’t be built. Sure, that’s slowly changing as more land is released, but it’s slow.
RENTAL PRICES – A SIGNIFICANT CHALLENGE
Rental prices on the Sunshine Coast in 2021 for people living here is a significant challenge. There is a lot to love about living here & it’s only getting better. The local council and the government are pouring a stack of money into infrastructure, and development & people are finally taking notice. You can read more about just a few exciting things in another article about changes on the Sunshine Coast here.
For locals, rental increases feel unaffordable, but the Sunshine Coast is still much more affordable than many other places in Australia. It’s easy to take for granted everything that’s on offer here. You need to ask around and speak with people who have traveled or lived in different areas of the world. They all have the same thing to say. “The Sunshine Coast is the best place in the world to live.”
For me, summer is still too humid, but sure, the rest of the year is stunning.
When we advertise a property on the rental market, we are now getting people applying for the property within hours of the property going online. We have over 20 groups inspect at a time and often over 20 applications per property.
Many people from interstate who are “cashed up” are offering to pay 12 months in advance, paying above the rent that’s being advertised. For locals, it’s a challenge.
RENTAL APPLICATION & HISTORY
It’s important to know that it’s illegal for property managers to ask a tenant to pay above the advertised rent or pay 12 months in advance. But tenants can offer it if they like. These sorts of “deals” are tempting for a property manager as the management is almost set and forgets for the next 12 months, but it can also be a trap. Just because someone has the money to pay 12 months in advance, they will still need to look after the home.
So what are we doing about this as property managers? We are looking at tenants offering to pay more and offering to spend 12 months in advance, but it’s not a golden ticket. We still do our reference checks, so we know who they are. If someone offers us a fantastic “deal,” but their references do not check out, they will still not get approved.
So here we are, where locals still have a solid chance to get ahead of these cashed-up people making crazy deals. Locals with a completed rental application, solid rental history, and stable jobs will have a far better opportunity to be approved than others. So to give yourself the very best chance, do these few things:
- Have your rental application fully completed with all emails and mobile numbers
- Supply all your past property managers’ mobile numbers and email addresses
- Supply all your past employees’ mobile numbers and email addresses
- Supply all past rental ledgers
- Supply an A4 that has a photo of yourself and whoever will also be renting with a summary of who you are
You can read more about getting your rental application approved here.
TENANTS ARE NOW SHARING WITH FAMILY AND FRIENDS
I am now seeing more and more families or friends moving in with each other. So while a family or couple may prefer to live independently, they are now welcoming a family member or friend to stay with them.
Recently my two daughters’ boyfriends have been staying with us. So we have gone from having four people in the home to having 6. For me, it’s been no trouble and no real difference. My biggest dilemma has been ensuring I don’t eat or drink food in the fridge that’s not mine. That has been slightly interesting. Open the fridge. That looks nice; oh wait, can I have it? Strange.
Something I’m aware of here on the Sunshine Coast is people’s desire to live near the beach or near work. It’s a stark contrast to Sydney, where I grew up. Work was over an hour’s drive away. At the same time, I only rented for a short time. The first property I bought was a run-down apartment in Bexley. I must admit Bexley was not a suburb I had any desire to live in. For me, it has the start of my real estate journey. Bexley would be compared to Nambour or Beerwah here on the Sunshine Coast. People should look at more affordable suburbs like Nambour, just like I did with Bexley.
Part of the appeal of the Sunshine Coast is the ability to live so close to the beach or so close to work. The thing is. It’s all packed. I can have breakfast in Montville and lunch in Mooloolaba, which is an easy 30 minutes drive. Most of the Sunshine Coast roads flow so smoothly that you can live anywhere on the coast and still be close to everywhere. Even traffic jams here are no traffic jams. You think that’s a traffic jam.
IF YOUR SUNSHINE COAST LEASE IS COMING UP FOR RENEWAL
Suppose you are currently locked into a lease. When this is becoming due, you will be given a lease renewal offer. When this happens, it will likely include an increase that will shock you. I have heard of some agencies increasing all their rents by $45 a week, regardless. We are doing things a bit differently. We are letting our landlords know what their property would rent for if it were empty and what they may want to consider raising the rent to with the current tenants in place.
I realise tenants would wonder why their rents need to be increased. There are so many reasons, but just a few are maintenance. Often landlords can’t afford care to be done, and an increase will assist with this. While owners are currently enjoying meager interest rates, most of these owners once had interest rates at 9% and higher. Interest rates will not stay this low forever. Then we have insurance. Building insurance, landlord insurance, and even council rates go up every year. By the end of 2021, all investment properties have to have their smoke alarms upgraded, costing around $1,000. Owning an investment property is expensive. Then on top of all this, almost all landlords’ rental income does not cover the loan repayment, so every month, the landlord has to contribute to the mortgage due to the shortfall.
MOVING AWAY FROM THE SUNSHINE COAST TO FIND MORE AFFORDABLE RENT
When I was around 20 and living in Sydney, there was a road that linked Parramatta to Penrith. It’s called the Great Western Hwy. Then the government built the M4. This freeway runs from Penrith into the inner west and Parramatta road. When this happened, more and more people moved to Penrith and even the lower Blue Mountains due to the affordability—commuting into the city for work.
Here on the Sunshine Coast, a similar situation is Gympie. With the recent road upgrades. Gympie is now an easy 60-minute drive from the Sunshine Coast. Housing is considerably more affordable, and I am already meeting many people doing this and moving to Gympie for the more affordable houses but commuting back to the Sunshine Coast for work & other events.
I worked in the Easter Suburbs and the North Shore back in Sydney. At the time, I lived in the Sutherland Shire. Kath and I considered moving to the Eastern suburbs, so we didn’t have the 1 hour, 30-minute daily drive, but houses were twice the price & while we could afford to do it, for us, it was money we didn’t want to spend. I assume people that moved to Penrith didn’t make a move because they wanted to but, like Kath & I, realised it was the intelligent, affordable thing to do.
At the time of writing, I did some research and found 90 properties for rent on the Sunshine Coast for $300 a week or less. So people also need to consider a mental shift. Can they do a three-bedroom homework? Do they need to rent a house, or would an apartment work? In Sydney, I’ve seen families with four kids live in two-bedroom apartments. Recently ABC wrote two fascinating articles about the move to Gympie and even people living in their cars.
Yes, the rental market is dramatically increasing, making securing a rental property challenging. But there are still affordable properties on the Sunshine Coast. If you are being rejected, look at sharpening up your application process and consider a mental shift to a slightly more affordable Suburb or smaller old house you usually would not have considered. While this change is new and a shock for the Sunshine Coast, it’s something that’s been happening in other areas for years, and people have had to adapt.