'Worst of bust': Gladstone property market 'approaching' bottom
IT may be time for Gladstone tenants to arrange a fixed-term lease to lock in those cheap rents.
Property gurus at Heron Todd White's say Gladstone's tenants still hold the bargaining power when negotiating rental prices, but that could soon change.
The team of property analysts aren't yet confident that Gladstone has hit the market's bottom, but housing sales have steadied and the risk of investing in units has been downgraded.
Vacancy rates hit rock bottom in March as major projects have been either delayed or cancelled, such as the Arrow Energy's Surat and Bowen Pipelines and the Euroa Steel Plant Project.
As a result, Queensland Treasury recently reduced its forecast for the number of fly-in-fly-out workers expected to flock to Gladstone in the next six years by thousands.
"Any local will tell you that Gladstone has always been a boom and bust town," the Heron Todd report states.
"Investment in the town soars when a new project begins as demonstrated over the past 50 years. This is always followed by a bust during which the town re-gathers itself and gets back to normal."
But four years into the bust, the property experts believe Gladstone may be edging closer to normality.
The experts believe that steadying vacancy rates, which peaked in this year's first quarter at 11.3%, could signal that Gladstone may be near the bottom.
"The vacancy rate peaked in the first quarter of 2016 at just over 10% and has been steadily falling since which may indicate we have seen the worst of the bust," the report states.
"Only time will tell."
REIQ last month reported that mining and resource companies had flooded the market with properties previously used to house workers, contributing to the rapid increase in vacancy rates from 3.8% in last year's March quarter.