I’ve been in Hervey Bay for a week now. Here are some of my observations about the current Hervey Bay property market.
- Rents have gone up a bit from when I last came here 2 years ago. A newer 4 bedroom house near the hospital can fetch $380 per week. Across town the same property runs about $350. Two years ago you could rent these homes for about $310 to $340.
- Home prices seem to be about the same. Maybe they’ve risen a little, but not enough to really notice. You can still buy a brand new 4 bedroom home in Hervey Bay for around the $320,000 to $330,000 mark. You could probably pick up a similar existing home for even less, say around the $300,o00 range. If you’ve got $400,000 ready cash, you can find amazing value in Hervey Bay. Back in the Alice, $400,000 wouldn’t be enough to get you a nice 3 bedroom unit!
Rents going up is a very good sign for property investors. Especially when you combine this with stable property prices. So, you can pay the same price for a house as 2 years ago, but now you get more rent. Not bad.
So, all those people who bought 2 years ago – like me – could have waited. We could have bought now, paid the same price and collected higher rent straight away.
Oh well.
I’m really encouraged by the rising rent prices. It means people are willing to pay. It means people have the capacity to pay.
Keep in mind, these rent prices are relatively low. They are way below what renters would pay if they turned into buyers! For the very same 4 bedroom home, an owner is probably paying a mortgage of at least $450 per week and all the other owner costs – taxes, insurance, utilities, maintenance, repairs. These costs all come after the owner has paid the bank a hefty deposit, probably on the order of $15,000 to $20,000 or more.
Yes, renters have it very nice in Hervey Bay. A lot of home, low rent. Especially low when compared to home ownership.
But, as rents continue to rise (if they do), the equation will start to turn. Owning will start looking more and more attractive. When that happens, watch what happens to house prices as more and more renters try and jump ship to become owners.
Could get exiting for current home owners.