The Hunter region’s rental situation could ease and become cheaper as the mining slump increases vacancy rates.
A Real Estate Institute survey for last month revealed vacancy rates have increased in NSW, the Newcastle Herald reports.
A flurry of new construction has also helped ease the situation.
While figures remained stable for the region at 2.9 per cent, REINSW Newcastle Hunter divisional chairman Wayne Stewart said the slump in the mining sector had impacted vacancy levels, especially in the Upper Hunter.
“In Maitland we have found the vacancy rates have gone up significantly, more into the mid three per cent range, due to the mining and associated resources downturn,” he said.
The flurry of construction was to provide accommodation for miners at mine sites.
“Construction projections had been based on the mining boom staying the course but a lot of that property has now hit the market, producing a glut of new property,” he said.
“This is good news for tenants as there will be an adjustment in rents.”
According to Stewart, rental prices in the region would have been almost $500 a week but would now stand at about $400 a week.
“Over the last six months we have seen a lot of major infrastructure jobs around the city come to an end and a lot of corporate leasing has now stopped,” he said.
“So there is a slight increase in opportunity for tenants for a reduction in rents – but only minor.”
Vacancy levels at Lake Macquarie was in the high two per cent range, while Newcastle stood at 2.2 per cent.
“Newcastle is going through an exciting phase, with a large number of development sites bought and about to commence construction.
“I believe over the next six months, demand for the construction sector will come back into the city. You will see the demand for Newcastle property increase.”
“There are a lot of people moving into the city,” he said.
Australian Mining reported the mining downturn affected Maitland in the Hunter Valley, with rental returns sliding in the past 12 months, according to research by PRDnationwide.