Rental market consolidates

The Gladstone rental market has been in a constant state of change since BG first announced the go ahead of the first LNG Plant on Curtis Island near Gladstone in November 2010.

Since the day of the announcement property investors have buzzed into Gladstone like bees around a honey pot, and justifiably so.

The growing pains have been obvious, with demand for domestic rental accommodation outstripping supply consistently for over 18 months now. However, answers to what has been described as “the crisis” have arrived late in the form of Workers Camps by all three LNG Plants. The camps will ultimately contain up to 6,500 rooms on site at Curtis Island.

The LNG Plants view the camps as a critical part of each project as it will reduce the need for workers to commute daily from the mainland whilst easing housing and traffic pressures in Gladstone itself. In recent weeks, the construction company for all three LNG Plants, Bechtel, have advised our office that the company has reached its peak requirements for rental housing from the private market, and have commenced moving single workers from around 115 homes to the Workers Camps on the three LNG sites.

Bechtel has also commenced rationalising its rental housing with the hand back of some older properties. Rio Tinto are in the final stages of vacating around 50 to 60 properties as construction of the Rio Tinto Refinery Stage 2 comes to an end.

The Rio Tinto event was to be expected and has had little effect on the rental market, however the Bechtel position has taken many by surprise in the industry.

To date there has been little to no data made available on what the accommodation requirements for the LNG Plants are, and projections have been loosely based on circumstantial numbers. These are often exaggerated.

“There will be thousands of people flocking to the City of Gladstone”, is a catchcry which has been mooted over and over during 2011 and 2012.

Affluent, well paid construction staff have been flying in, often displacing the working class who have relocated to more affordable centres such as Bundaberg or Hervey Bay, as escalating rental rates have literally priced them out of the market.

What eventually occurred, however, was a two tier rental market, where the working class today typically pay $400 to $500 per week for a modest home. Conversely, company tenants have a diet for brand new properties at rates of $650 per week and upward.

Hundreds of homes and units have been created for the company tenants and the leasing of these properties has been very competitive to date. Demand in the working class market remains relatively strong, as we continue to receive encouraging levels of enquiry for these type of properties. However, demand for new properties has reduced with athe withdrawal of Bechtel from the marketplace.