Tenant demand in region is still weak, says REIQ
BUNDABERG is one of the cheapest places to rent a unit compared to other nearby regions but is that a good thing?
The latest quarterly data from Australian Property Monitors shows that the median weekly rent for units in Bundaberg sits at $245 compared to Fraser Coast at $275 and Gladstone at $300.
REIQ research analyst Yvette Burton said a low median weekly rent was not necessarily indicative of a weak rental market.
"From an investor's perspective, the rental income is relative to the purchase price - in other words, what rental yield a property can achieve is the ultimate litmus test," she said.
"In Bundaberg, the median sale price for units has been around $240,000 so a property bought for $240,000 and achieving $245 per week rent, equates to a gross yield of 5.3%.
"This is comparable with the likes of other regional centres, which typically achieve higher gross yields than metropolitan centres, due to the relatively affordable purchase price of properties."
Re/Max Precision principal Scott Mackey said at the moment it had about 315 rental properties available in the Bundaberg region - 106 of those being units.
"Generally that figure would be below 100 units," he said.
"The lowest priced unit we have to rent is $160 per week in George St which is a one bedroom, one bathroom unit.
"The dearest unit we have is $1000 a week which is in Bargara and is a three bedroom, three bathroom unit."
Mr Mackey said after the floods the rental market really tightened up considerably because a large amount of the rental homes were flooded.
"That created a necessity for shelter that took a lot of stock that was for sale," he said
"People that had property for sale and were vacant were immediately put out to rent for six to 12 months."
"There was a while there where there was a number of stock be it for rent or sale but we are cleaning through that now."
Ms Burton said according to local REIQ agents, tenant demand was still weak, with people leaving the area for work reasons and not as many relocating to the region.
"However, in comparison to the likes of Gladstone and Mackay, where vacancy levels are above 5%, Bundaberg's vacancy rate of around 4% is one of the lowest of the regional centres."