Education Centre

Rental Prices Climb

It's generally accepted that real estate agents could lift their level of professionalism.  Our peak industry body has been agitating for a higher standard and level in the training requirements for individuals seeking to gain an agent's license for some time now.    

Never has the realty of this alarming lack of training been more worrying then when a client of ours was told by a local agent yesterday, "Some agencies in town are pushing rents too high, and soon it will burst and there'll be egg on everyone's face". 

Oh my, the old, "Prices are too high" Chicken Little syndrome.  Words such as shonky, unskilled, lazy and hopeless come to mind.  This type of rubbish is evidence of ill-informed agents operating directly in contravention of our industry code of conduct; to look after the interests of our clients.   

If this particular agent had any idea of how economics works they would know about the basic laws of supply and demand, "The market price of a good is the intersection of consumer demand and producer supply. If the price for a good is at a low level where consumers demand more of the good than producers are prepared to supply, there will be a shortage of the good, and consumers will be willing to pay more for it."

At the moment there is a shortage of housing (the goods), and as a result tenants (the consumers) are willing to pay more for tenancies.  We don't now how high the ceiling is so that's why our agency has introduced tenant tendering.   

Agents holding prices back because 'egg will be on our face' are costing their clients millions of dollars every year.  They should be bared from operating.

But will price ever fall?  Yes!  Supply will increase or demand will fall and returns will go backwards or stabilize, as they have in the past.  But last time I checked there's no flood of either public or private housing coming into this market, and while the sun still shines southerners (like my wife) will continue to make Queensland home.   

Falling prices or a stabilized market won't be egg on our face; it'll be evidence of a healthy economic cycle.  Being fearful of price rises and then under selling property is a crime as outlined in our governing Act.   

Un-Australian? 

Most recently the Minister for Housing, Robert Scwharten, labeled tenant tendering as un-Australian.  Is it un-Australian to allow the market to determine price for scarce goods?  Is it un-Australian for tenants to dictate their budget and set the price they are willing to pay for housing?  

It's amazing that the first attack on any forward thinking or enterprising idea in this country is commonly, "That's un-Australian".  Whether it unskilled immigration, one day cricket, or the sale of QANTAS, some self proclaimed champion okka yells from the cheap seats at the GABBA, "That's un-Australian".   

I think it's un-Australian to turn your back on struggling battlers looking for a home while blaming every other tier of government other then you're own.  That's exactly what the Government has done with it's dismantling of the public housing sector.  Public housing waiting lists have grown and the government has done nothing. 

Dismantling public housing is a regressive program, and has set Australia back.  It's un-Australian.  

After my Grandad returned from the war in the Middle East my Grand-Parents built their first home in Mt Gravatt as a result of a returned serviceman housing project.   That's a very Australian story.  A very un-Australian story is waiting in a Queensland Housing Commission queue for 5 years to get your family of 6 a roof only find the Ministry of Housing would prefer to sell public housing rather than build it. 

What are your views?  

Vote on our on-line poll.  Q.  Should tenant tendering be made illegal?

 Should tenant tendering be made illegal?  Is it un-Australian?  My view is clear, but if you're not sure on how I feel can you read some of my previous blog entries –

 Click here for blog entries

 Or go to our web forum for our on-line poll -

•  From the bar above click 'forum"
• Property strategy
• Then "tenant tender"

 Make sure to register as a forum member if you're a first time user.  Once you're registered you can vote or add you're views.  We'd like to hear your feedback.