Louis Christopher<\/a>\u00a0joins us to look back at how we ended 2014 and what he thinks is ahead for this year.<\/p>\n <\/p>\n
Transcript<\/h4>\n
Kevin:<\/b>\u00a0 One of the things that\u2019s of most interest to most investors is what\u2019s happening with vacancies, how many tenants are going to be on the move. Traditionally, we see at the end of the year that a lot of people are on the move. That\u2019s certainly been reflected in the figures, the vacancy rates that have been published by SQM research.<\/p>\n
The man from that organization, Louis Christopher, joins me on the line. Hi Louis?<\/p>\n
Louis:\u00a0\u00a0<\/b>Good day there, Kevin.<\/p>\n
Kevin:<\/b>\u00a0 The December figures for vacancy rates, what do we see?<\/p>\n
Louis:\u00a0\u00a0<\/b>We saw nationally a rise in vacancies. Our vacancy right now stands at 2.6% nationally, which approximately translates to about 57,000 properties being vacant on the market nationally for the month of December.<\/p>\n
Kevin:<\/b>\u00a0 That\u2019s firmly in the middle of that 2% to 3% band, which is an area I think you closely watch, isn\u2019t it?<\/p>\n
Louis:\u00a0\u00a0<\/b>That is so. Generally speaking, we believe that that\u2019s a market that\u2019s in equilibrium, where it\u2019s neither tenants nor landlords controlling the market and putting a downward or upward influence up on the market. But I can\u2019t stress enough that each city is really telling its own story, so we\u2019re seeing some cities where we\u2019re getting big rise in vacancies right now, both month-on-month and year-on-year, which is a concern.<\/p>\n
Kevin:<\/b>\u00a0 Whereabouts are they, Louis?<\/p>\n
Louis:\u00a0\u00a0<\/b>Surprise, surprise, Kevin. They\u2019re in the mining- or commodities-related towns. We\u2019re pretty concerned about Darwin at this point in time. We\u2019ve been seeing basically about seven to eight consecutive months now of rises. We have a vacancy rise in Darwin of 3.4%, and there was a massive increase on the November result. That\u2019s already putting downward pressure on rents on our measurement. We\u2019re seeing fuller rents in Darwin now over 8% year on year, so we\u2019re very concerned about Darwin.<\/p>\n
Perth is also another weaker city. We have a vacancy rate\u2013 it doesn\u2019t sound that high \u2013 of 2.8%.<\/p>\n
Kevin:<\/b>\u00a0 It\u2019s a struggling market, Perth, isn\u2019t it right now?<\/p>\n
Louis:\u00a0\u00a0<\/b>Yes. It\u2019s relative. Back in the beginning of 2013, we had a vacancy rise in Darwin of under 1%. It\u2019s that relative movement, going from under 1% all the way up to 2.8%, which is putting a lot of stress on landlords, because it\u2019s definitely clearly turned into a tenant\u2019s market, and hence the reason why we are seeing falls in rents in Perth, as well.<\/p>\n
Kevin:<\/b>\u00a0 What about some of the other markets? Let\u2019s say Brisbane. What\u2019s happening there?<\/p>\n
Louis:\u00a0\u00a0<\/b>In Brisbane, things have been rather steady. We haven\u2019t really seen a big move either way. We have a vacancy rate in Brisbane for December of 2.7%. Now, there\u2019s a bit of seasonality there. We tend to get higher vacancies in each December. That\u2019s not just in Brisbane. We do see that in other capital cities. This time last year, Brisbane we had a vacancy rate of about 2.6%.<\/p>\n
Kevin:<\/b>\u00a0 I see. It\u2019s not a big movement up, and it\u2019s consistent with what\u2019s happening nationally, isn\u2019t it?<\/p>\n
Louis:\u00a0\u00a0<\/b>Yes, that\u2019s right. One thing we are seeing in Brisbane \u2013 and you might recall I raised this about 12 months ago \u2013 is we\u2019re definitely seeing on going elevated vacancies in the CBD itself. Right in the heart of the city saw quite a lot of vacancies.<\/p>\n
Kevin:<\/b>\u00a0 We\u2019re going to see that continue I would think, with the amount of stock that\u2019s coming on, as well. Just looking around at the number of cranes on the horizon, it always tells a bit of a story.<\/p>\n
Louis:\u00a0\u00a0<\/b>That\u2019s correct. I think for Brisbane, for the CBD, vacancy rates are likely to go higher from here rather than lower over the course of 2015. I have to say, though, on the east side of Brisbane \u2013 like Wynnum \u2013 we\u2019re seeing tighter vacancy rates there. We\u2019re seeing vacancy rates actually back below 2%.<\/p>\n
We like the east side of Brisbane, and we don\u2019t mind the west side. We think that\u2019s slightly favoring landlords there. It\u2019s the CBD itself that really seems as though it\u2019s favoring tenants right now.<\/p>\n
Kevin:<\/b>\u00a0 Yes, which is a bit surprising. You look on the west side of Brisbane over around the Toowong area, which carries a lot of students, as well. I know one of the reasons why the vacancies seem to spike at the end of the year is because of students vacating.<\/p>\n
Louis:\u00a0\u00a0<\/b>Yes, that\u2019s right. It\u2019s not just students. Lots and lots of people decide to make a change before Christmas or just after Christmas for the New Year. So you do see a lot of movement around the country, not just city by city but in the regions, as well. That\u2019s the reason why you see the seasonality in December, where we tend to get higher vacancy rates in December.<\/p>\n
Kevin:<\/b>\u00a0 We\u2019ll talk to you again real soon. Louis Christopher from SQM Research. Thanks for your time, Louis.<\/p>\n
Louis:\u00a0\u00a0<\/b>Thank you, Kevin<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Today, Market researcher\u00a0Louis Christopher\u00a0joins us to look back at how we ended 2014 and what he thinks is ahead for this year. Transcript Kevin:\u00a0 One of the things that\u2019s of most interest to most investors is what\u2019s happening with vacancies, how many tenants…<\/p>\n","protected":false},"author":176692473,"featured_media":2657,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[101],"class_list":["post-25181","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-podcast"],"yoast_head":"\n
Market wrap for 2014 and what's in store this year - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/market-wrap-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market wrap for 2014 and what's in store this year - Realty Talk\" \/>\n<meta property=\"og:description\" content=\" Today, Market researcher\u00a0Louis Christopher\u00a0joins us to look back at how we ended 2014 and what he thinks is ahead for this year. 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