Reply With QuoteIt is all just supply and demand. I don't see greed as being a factor. If peopole are willing to pay those rent prices, why shouldn't property owners charge them?
At Rest
Check out the following.In my opinion sheer greed We have learnt not a thing from the recent " depression" Anyone considering work over there want's to be cashed up before going ,by the looks of it ...comments.
John ( disco44)
The West Australian ©
Rents in the Pilbara have reached $3000 a week on the back of major mining projects, sparking warnings that the region's housing situation is unsustainable.
Local estate agents say a spate of mining project announcements have increased residential rents to levels higher than before the global economic downturn, with the situation worse in Port Hedland than Karratha because of less land being released.
BHP Billiton and Rio Tinto have just agreed to combine their WA iron ore assets and the first sod has been turned on the $43 billion Gorgon LNG project.
A five-bedroom house in Port Hedland on an ocean block is being leased for $3000 a week and a seven-bedroom fibro house with ocean views on a 1330sqm block recently sold at auction for $2.3 million - $1 million above the reserve price.
Agent Brett Philp, of Ray White Port Hedland, said the property, previously owned by the State Government and used as an office block, was sold to a local business owner who intended to use it as accommodation for his employees.
Mr Philp said he had not heard of such a price being reached in Port Hedland before for a residential property.
"The confidence here is just staggering," he said. "It is just insane."
REIWA Pilbara chairwoman and Port Hedland real estate agent Jan Ford said good four-bedroom houses in Port Hedland were renting for about $2500 a week while an average three-bedroom house was being leased for about $1600 to $2000.
"It's not sustainable to have these sorts of rents because at the end of the day no matter how much rent you pay, it all gets added on to the end user," she said.
Ms Ford said many of the properties were owned by investors from Perth and interstate, which meant locals were priced out of the market.
Mining companies usually leased the properties and subsidised the rent for their employees, she said.
Richard Naulls, director of sales at Ray White Karratha, said rents for top-of-the-range four-bedroom properties in Karratha were about $2200 to $2500.
Debra Tarabini, a property investor from Perth, owns four properties in Karratha with two friends which each rent out for about $2000 a week.
"We've always wanted to get into Port Hedland but to pay a million dollars for something that was built in the 70s, is asbestos and very unattractive, we just can't part with our money even though they do get very good rentals," she said.
Jade Saligari, 26, who works in sales, is one of seven people renting a five-bedroom house in Karratha at $2500 a week.
She has had to take up a second job to help pay the $500 a week rent she pays for a room she shares with her boyfriend.
ForumSage
It is all just supply and demand. I don't see greed as being a factor. If peopole are willing to pay those rent prices, why shouldn't property owners charge them?
Wizard
Limited land available at Port Hedland too cause of flood plain so limited housing stock, last year a transport company bought one of the pubs for its accommodation block for its drivers as it couldn't get rooms for them to sleep in overnight.
Accommodation going to get tighter with Barrow Island and Pluto developments expected to generate demand for another 6000 employees accommodation. Some companies involved in Iprex project a Japanese LNG refinery are actually looking at developing their accommodation facilities at Broome and flying people to wok out to the island where they are building the plant
Prices aren't dissimilar to the prices paid during gold rushes in Yukon 100 plus years ago, thats the joy of living in a free market society
At Rest
I do disagree sorry. What broke the UK and the US plus a lot of other countries around the world..GREED.Check out the latest from the UK where they have just passed legislation to heavily tax any Christmas bonuses to be paid to UK banking bosses this year.This apparently has the full support of the voting public which in the case of the UK Labor government is a revelation indeed.Also what has happened to the old aussie adage for everyone to have a "fair go"? Has Australia changed that much that the almighty dollar reigns supreme. It appears that the "fair go " principal is OK now only after some have taken their pound of flesh.Originally Posted by BigJon
John ( disco 44 )
ForumSage
I don't understand what you don't agree with. It is simple free market economics.
The higher the demand relative to supply, the higher the price.
More supply relative to demand, the lower the price.
I can't see how greed comes into it.
SysAdmin (Owner)
your right, greed is the wrong term. the correct term is usury, i believe.
you own moral code lets you take it or leave it...
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ForumSage
I own a house, which I charge rent for. Therefore I am receiving income without working. According to my very brief websearch on definitions, that is usury... Another quick search shows the Merriam - Webster definition:
Main Entry: usu·ry
Pronunciation: \ˈyü-zhə-rē, ˈyüzh-rē\
Function: noun
Inflected Form(s): plural usu·ries
Etymology: Middle English usurie, from Anglo-French, from Medieval Latin usuria, alteration of Latin usura, from usus, past participle of uti to use
Date: 14th century
1 archaic : interest
2 : the lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates
3 : an unconscionable or exorbitant rate or amount of interest; specifically : interest in excess of a legal rate charged to a borrower for the use of money
I can't see how house rent prices fall under that definition.
My moral code doesn't have any issue with what I am doing. I believe that I am providing housing for someone who can't afford to buy a house of their own, or chooses not to for whatever personal reasons.
If I owned property in the towns in the article, I would charge fair rental with regard to the market. If that meant $3000 per week, then so be it. The same thing applies. Providing housing for those that can't afford to or choose not to own their own.
Rents are different for different areas and different properties.
Landlords can't force anyone to rent a property. If your rent is too high, you won't get tenants. Clearly in those towns, the rent is not too high, because all the houses are being rented.
The only way to lower the rents is to change the ratio of supply to demand. That is, either have more houses available or have less people wanting to rent.
Last edited by BigJon; 10th December 2009 at 12:12 PM. Reason: Kept adding bits!!
At Rest
I also own a house that I rent out but for $275 a week .I also checked the word and have to agree with your definitions....but the word " exorbitant" which is in one definition I pulled up really applies in the WA instance.
Cheers'
John.
Master
I live up in port hedland and its crazy.
The only reson i survive up here is coz i work for BHP and only pay $100 a week rent.
Its not coz of flood plains. its coz of pure and simple greed. the council members have a vested intrest in the realestate market
Also lot of aboriginal title issues as well.
Its not like gold rushes of the past as we have "fly in fly out" workers now.
And its these workers that destroy the town.
Not by there own doings (althow you can pick the FIFO workes a mile off) but because no spending is done in the town they all rape the town of its money and take off again to spend it elsewhere where there is stuff to do and thing to spend it on.
My opinon is that FIFO work should be outlawed and this will stop a lot of the problembes faced.
ChatterBox
I would have to say that it is the laws of supply & demand.
When banana's were in short supply, up went the price. When potatoes are short, up goes the price.
What are the food prices like in these towns? Are they at their normal levels, or have they increased due to the demand as well?
As has been said, a property, or a banana for that matter, is only worth what someone is willing to pay for it. If the companies subsidising these rents feel that they are getting ripped off, then they have the option of not paying them and making alternative arrangements.
Additionally, look at the flow on effect. Higher property values mean that local councils get to charge more for rates. Governments reap more in sales tax when the property changes hands, and for those that are renting out their houses, the tax they pay is greater.
Providing the authorities re-invest their new found windfalls into the local communities, then it goes on to benefit everyone. New roads, better parkland's, new shopping centres etc.
However, as was said in the article, the flow on effect flows through to the cost of the end product, that most of us will use in one form or another.
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