Rental returns continue to drop in Gladstone
THE rental bubble has not burst but it is getting very small in Gladstone as property investors start to feel the squeeze.
Unit and house rent returns continued to slip, with the former dropping 1.7% and the latter tumbling 7.9% from August to September, the Domain Group rental quarterly report reveals.
There were 432 units and 882 houses available for rent in the same period.
Gladstone's figures were on trend with national figures - the country's median rent for units fell 0.4% and houses dropped 0.3%.
Domain Group senior economist Dr Andrew Wilson said the drive-in, drive-out workforce and an oversupply of stock added to the pain.
"It's not good news for investors continuing in that Gladstone market," Dr Wilson said.
"Rents for units and houses in Gladstone were down by more than 25% over the past year, and it really does continue to reflect that continuing trend of a softening rental growth in the region over the past two or three years.
"I guess it's the confluence of factors of over-supply and cheaper accommodation options (in other areas) for the workforce."
Dr Wilson said the figures looked dire but there was hope for investors.
"The key factor is we're not yet seeing a sense of bottoming out in those rental markets," he said.
"I still think there's still some way to go before it bottoms out. It's just one of those factors where the local economy is still doing quite well... but it's just that workers are choosing to live elsewhere."