'Suffering': Landlords in trouble with nightmare rent drop

WHEN Carey and Brad McIntosh bought a townhouse in New Auckland in 2009 they thought they were making the right move

WHEN Carey and Brad McIntosh bought a townhouse in New Auckland in 2009 they thought they were making the right move.

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The boom was just around the corner and in their first year of renting out their three-bedroom townhouse, on Nothling St, the young couple was pulling in $260 a week.

The couple moved to Western Australia for work, the boom hit and their decision to invest in bricks and mortar looked like a master stroke.

At its peak, they were collecting $400 a week in rent and managed to use part of the money to pay for a wedding, go on a holiday and buy an investment property in Mackay.

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TOUGH TIMES: Investing in a house in Gladstone is starting to bite for this young couple.

Seven years on, and with the housing market in Gladstone and Mackay in pieces, the McIntoshs are in trouble.

"Our current tenant is paying $210 and once she leaves our real estate agent has advised us to drop the price down to $120," Mrs McIntosh said.

"$120 a week is better than nothing but it nowhere near covers our costs.

"It was very shocking."

If the McIntoshs are lucky enough to get a tenant in at $120 a week for 12 months, once you add in rates and body corporate fees they will be left with a little more than $2000 to pay back their mortgage.

Elders Real Estate Gladstone principal Colin Burke said there were 1050 vacant properties in the 4680 postcode, which was a slight reduction from January when vacancies hit 1136.

"We're suffering from an oversupply from the boom times and what's happening, because rents are so cheap, people are graduating to better quality houses and that means older-style townhouses are on the bottom of people's lists," Mr Elders said.

He said some townhouses were being rented for between $80 and $100 a week.

With her stress levels rising, Mrs McIntosh wanted to know how Gladstone ended up with such an oversupply of housing.

Between 2011 and 2015 the council gave 3921 dwellings operational works approval to deal with the influx of workers to Gladstone.

But by June 2015 97% of the non-resident working population in Gladstone was living in five-worker accommodation villages.

TOUGH MARKET: This townhouse in New Auckland once fetched $400 a week in rent, now it's on the market at $120. Picture: Realestate.com.au

When the boom hit, Mayor Matt Burnett, said the council knew Gladstone was going to have a housing shortage.

"We had three LNG plants being built at the same time and we had all of those LNG people using up all of the motels," he said.

"Builders were building as fast as they could and we were playing catch up."

But as the boom ended and the jobs dried up, people left town to find work elsewhere, leaving vacant houses dotted all over the city.

"This is not the fault of the previous council because if a developer wants to subdivide land, and it's properly zoned and it ticks all of the council's boxes, we have to approve it by law," Cr Burnett said.

"I have no doubt it will turn around and my advice would be to stick with it."

But that might be cold comfort to Mrs McIntosh, who said she could not afford to sell her townhouse.

"We feel disappointed because going back eight years ago everyone was saying it was a good move," she said.

"We aren't talking about defaulting on our mortgages but it has set us back in terms of our financial position.

"We can only hope things get better because I don't know how anything could get worse."

Originally published as 'Suffering': Landlords in trouble with nightmare rent drop