'Difficult times': Rental prices tipped to increase in 2017

PROPERTY investors who have already toughed it out over the past two years may want to hold on for a bit longer, with rental prices tipped to increase.

GREAT BUYS: There are some great rentals and houses to buy in South Gladstone. Head to gladstoneobserver.com.au for the top 10 homes under $100 to rent right now in the Gladstone region. Picture: Mike Richards GLA120117RESG

PROPERTY investors who have already toughed it out over the past two years may want to hold on for a bit longer, with rental prices tipped to increase by the end of the year.

Good Real Estate principal Brett Donges said although investors had experienced "difficult times", Gladstone may soon get back to a position where "people start to see a profitable return (on their investments)".

He said a rise in rents would come off the back of a surge in people moving to Gladstone, which would push rents for higher-end homes up.

"The rental market plateaued about October last year and we are seeing the upper end of things starting to increase," Mr Donges said.

"As the amount of these (higher-end) properties get taken up, you'll see the lower end start to (increase) as well.

"A lot of people who were renting a two bedroom townhouse or older style home upgraded (over the past year) and once prices start to go up, they'll start looking at lower price rentals again."

In the latest Real Estate Institute Queensland Market Monitor Report, it said Gladstone's rental market was the "most affordable" region for three-bedroom houses and townhouses in the state.

"The rental market has operated in the weak range, peaking at a height of 11.3% in the March quarter and down to 8.9% in the September quarter," the report said.

HOT PROPERTY: This two-bedroom unit in South Gladstone is going for $90 a week and is one of several homes you can rent for under $100. Picture: Realestate.com.au

"The median rent for a two-bedroom unit was $150 per week for September, which was equivalent to two-thirds of the weekly median rent in Mackay (the second cheapest one among the largest Queensland regions)."

In the 4680 postcode the average weekly rent for a three-bedroom house was $190, which was $100 less than September 2015.

But by the end of the year Mr Donges said a four-bedroom home with "all the bells and whistles" would fetch between $400 and $450 a week for rent, while townhouses and units may creep up to $250 to $300 a week.

"We're not going to see things get back to where they were during the boom years but it should get back to a nice balance where landlords will start to see a positive return," Mr Donges said. "The heart is starting to beat again... it hasn't just been Gladstone, we've had a spectacular correction and we are rebounding back."

Trends

3 bed houses September 2016 $190 v 2015 $290

2 bed units September 2016 $150 v 2015 $220

3 bed townhouses September 2016 $190 v $300

Originally published as 'Difficult times': Rental prices tipped to increase in 2017