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THE shortage of rental properties in Queensland's Far North is expected to bring investors and developers back into the market.
Property researcher Rick Carr said the rental vacancy rate in Cairns was just 2 per cent.
He said if it fell below 2 per cent it would be reaching "almost stress levels" and if it continued in the next 12 months then the lack of properties for rent would reach "crunch time."
"There is very little new supply. There are virtually no new rental units under construction," Mr Carr said.
"Rents are starting to climb and in the past 12 months houses have gone up by $10 a week and units by $5 a week and they will continue to climb," he said.
Mr Carr, the research director of Herron Todd White in Cairns, said he expected rents to rise by up to $30 a week in the next 12 months.
"It's creating a very good equation for investors to come into the Cairns market," he said.
"There is very little new supply. There are virtually no new rental units under construction."
Mr Carr said there was a time when a $350,000 house returned $350 a week in rental income, and while that house was now worth $320,000, the rent had risen to $360 a week.
"The rental return for investors is continuing to improve, however, there is very little capital growth in the rental proposition," he said.
Mr Carr warned that Cairns was facing competition elsewhere with rental property shortages in Townsville, Mackay and Rockhampton where it was more suited to the mining industry.
He said it was up to Cairns investors to initiate the demand to attract out-of-town buyers.
Mr Carr said last year there were just 112 new unit sales, down from 1600 in 2007.
Real Estate Institute of Queensland Far North chairman Greg Clyde-Smith said there was definitely a shortage of houses for rent.
"Some developers are making noises about building unit complexes but there is still an over supply of apartments," he said.
Mr Clyde-Smith said demand for houses was high.
Article printed in The Cairns Post - Thursday 28th June 2012
Peter Musso licensed real estate agent at Ray White Cairns Beaches selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica and surrounds.
Demand for turnkey rental the past few years has increased — a function of foreclosures and fewer existing rental properties making the decision to buy
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