Ever wondered what it’s like to get caught in a property market bubble?
Well just imagine paying nearly $50,000 a year in council rates on top of mortgage repayments for properties that no one wants to rent.
That’s where real estate agent and investor, Bella Exposito finds herself after prices went up in the Queensland mining town of Moranbah, and then came crashing back to reality.
“About 70 per cent of my wages is going out on mortgage repayments, and rates are on top of that cost. It makes me feel sick and very angry.”
Property prices in the town have gone from boom to bust since 2012, when miners started being able to fly-in-fly out of the area.
Homes that were once fetching as much as $4000 a week, are now lucky to be tenanted for $500 per week.
“Prices were just unrealistic,” says Bella, adding that if she had sold her family home at the peak in 2011, it would have fetched about $920,000, that’s about four times what she’d value it at today.
“I know the local council have expenses to meet but asking for $2600 on average for each of the properties I own is a joke.”
Bella is the owner of 19 properties, which she acquired over her 30 years working in real estate in the local mining town. This includes seven near brand new homes and 12 one-bedroom units.
But most of those properties have nearly halved in value since 2011.
“I can’t say it’s a financial loss yet because I haven’t sold, but the value of my properties has come down 60 to 70 per cent.
“I’m a real estate agent, so if I’m not safe, no one is.”
The added dilemma for Bella is that an oversupply of properties in the local market means there’s little demand for rentals.
“We have about 500 properties on our office rental role at the moment.
“I’ll be okay until December to meet my repayments. But after that I don’t know.”
“I’ve met with Isaac Regional Council members and after they hiked rates in July 2016 they are likely to put rates up again.”
In addition to that, from July 1 this year, the local council will also begin charging for all water consumption on top of current rates charges.
“I have some small one bedroom units that are only a tiny 35 square meters in size and the annual rates are around $2600 per unit which is the same as an average house in Moranbah.
“This amount is around three times what I pay on similar properties that I own in Brisbane, where I have access to much better services and great demand from tenants.”
For some time now Bella has been a vocal critic of the property downturn in the Queensland mining town of Moranbah, which she blames on the Labor Government under Anna Bligh, approving fly-in-fly out workers.
“Before miners would settle in the local area, but now 70 per cent are opting to fly in and fly out, and they are not even coming into town to shop with buses taking them from the airport to work, and back again.
“Now we have a lot of supply of properties but no demand.”
Because of the downturn, Bella thinks the local market is now looking ripe for investors to grab a bargain.
“Properties are starting to sell slowly and a lot of local people and young families who couldn’t afford to buy during the boom are now starting to come back to Moranbah.
“I’m now telling my son to buy one, because you might pay $200,000 and the rent you’d get would cover his mortgage after a 30 per cent deposit.”