Tenants to be hit by high-rise rate increases
By CHRISTIAN STANGER
AN increase in rates of some Gold Coast units could trigger an increase for tenants as well, according to the Real Estate Institute of Queensland.
Terence Allen of Harcourts Real Estate in Broadbeach and the Gold Coast representative for the institute said the recently announced increase of rates for units located on the fourth floor and up on high rises, which slugs unit owners with an average of $77 in additional charges, will probably force owners to increase the rent on their properties.
"It has quite a few flow-downs with one of the biggest being for the renters out there, because if an owner is hit with that cost, they will transfer that cost down and it's going to hit the tenants so the rents will go up," Mr Allen said.
"For those people that might be on savings plans, or just struggling to make ends meet as it is, there will be a rental increase and the market is tight as it is in rental."
The rate increase will vary from five to 40 per cent and will average out at about $77 affecting approximately 43,000 of the 93,200 units on the Gold Coast.
Mr Allen said his position and the position of the REIQ was that things should be fair and just for all property owners but asked how fairness can be achieved when only levels four and up were charged the increase. He claimed the increase would hit investors hard.
"When they buy a property they have to pay the investor stamp duty, so they're paying a premium stamp duty to start with, then they have the normal costs like body corporate and management fees, and then they'll be hit with another charge on top which is this rate increase," Mr Allen said.
"It slugs the investor and I think if you paint the canvas of the Gold Coast with no high rises, we would not be a tourist destination."
Mr Allen said it was unlikely that investors would move away from the area but it would be difficult to entice new investors into the Gold Coast market with the increased rates.
"There's really no carrot to dangle for investors now. They say 'come onboard on the Gold Coast, invest here and get great returns' and the general market returns around three to four per cent in residential anyway," he said.
"At the end of the day, where is the investor going to put their money, in real estate, keep it in the bank or in the stock market? We don't know."