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Friday, December 23, 2016

Brisbane, Melbourne investors turn to Airbnb for tenants

Dec 2 2016 at 5:39 PM Updated Dec 2 2016 at 5:39 PM Save Article License Article Brisbane, Melbourne investors turn to Airbnb for tenants Share via Email Share on Google Plus Post on facebook wall Share on twitter Post to Linkedin Share on Reddit Property owner Jason Agnew uses Airbnb to rent out his one-bedroom unit because of apartment oversupply in Brisbane CBD. Property owner Jason Agnew uses Airbnb to rent out his one-bedroom unit because of apartment oversupply in Brisbane CBD. Tammy Law Share on twitter by Misa Han The oversupply of apartments in the Brisbane and Melbourne CBD is forcing property investors to resort to Airbnb as an alternative to longer term tenants. Gold Coast-based property investors Jason Agnew and his wife Louise have taken that course for a 59-square-metre one-bedroom unit in Oaks Charlotte Towers in the heart of Brisbane CBD. The couple, who run their own wealth advisory company Lyfe Property, turned to Airbnb because they were worried about not being able to find a long-term tenant quickly enough. "We've looked into it seriously through two different agencies. It's quite unreliable because of oversupply of units up here, so we thought we would give Airbnb a shot," Agnew told AFR Weekend. If the flat is let full-time, the Agnews will get $560 a week in rental income after paying a 20 per cent commission to Hostmybnb, a company that manages Airbnb properties. Agnew reckons he would earn about $440 a week from long-term tenants after paying an 8 per cent commission to real estate agencies. Brisbane has one of Australia's highest home vacancy rates at 3.0 per cent, compared to 1.7 per cent in Sydney and 1.9 per cent in Melbourne, according to the latest SQM Research data. In Brisbane CBD the vacancy rate is as high as 5.1 per cent and in South Brisbane, 5.8 per cent. Last month the Reserve Bank of Australia internal documents said inner-city Brisbane and Melbourne were facing oversupply of new apartments. Supply in Brisbane CBD is expected to increase by 25 per cent in in the next two years. Uniquely Brisbane problem Managing director Oliver Lee of Sydney-based Hostmybnb said three out of four inquiries were now from Brisbane investors who can't find long-term tenants. "We actually didn't want to go to Brisbane to tell you the truth, but we started getting hammered with inquiries from investors," Lee said. The company now has a property manager in Brisbane who looks after six properties and is planning on taking on three more in the coming weeks. "It's a uniquely Brisbane problem because there is an oversupply of apartments. And the reason why they contact us is because they can't find any tenants." Lee said one potential client had to lower rent from $480 to $350 for a two-bedroom apartment in Brisbane's South Bank. He said investment apartments often sit empty for two or three months. But even on Airbnb Brisbane investors are facing the oversupply problem. According to Airbnb data analytics site Beyond Pricing, since January 2015 Brisbane's Airbnb properties had an average vacancy rate of 52 per cent, compared to 33 per cent in Sydney and 40 per cent in Melbourne. Melbourne investors getting on board Agnew said he was worried about not having enough guests but the occupancy rate so far has been relatively high, including both corporate travellers and tourists. "We were concerned about that but the unit is in the Brisbane CBD so we are not just hosting guests who are on holiday," Agnew said. "One concern is if more investors join Airbnb maybe there will be oversupply but there is not much competition at the moment." Melbourne-based Airbnb property management company HostKeep has also noticed the trend. Owners of one Southbank two-bedroom apartment lowered the rent from $560 to $520 in a five-week campaign and couldn't found a tenant. The residential vacancy rate in Southbank is double the Melbourne average at 3.8 per cent. "We have a lot of owners who contact us because they've been waiting for too long to find quality tenants," HostKeep director Gareth Men said. "With the supply of new apartments coming it's only going to get harder." misa.han@fairfaxmedia.com.au Preview thumb AFR Magazine Dynamic Watch Summer Explore the new interactive Summer issue of our Watch Magazine. 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