Unit Owners are up in arms about the recent Gold Coast Council Rate increase that puts many under financial pressure and ultimately contributes to lowering the value of their properties.
In recent years, there has been a steady increase in Gold Coast Council and Water Rates. The increases have coincidentally accompanied the decline in the value of homes in Body Corporate communities on the Gold Coast.
The situation was worsened when the Gold Coast Council Rates and Water Rates were separated and Allconnex was set up in 2010 specifically to handle water. This separation was a recipe for increases and property owners were shocked at the gradual increases in their water rates and Council Rates.
The bottom line for owners is that the value of their investments has declined and the decrease in value must surely have been affected by the Gold Coast Council Rate increase.
I took a sample of Council Rates and Water Rates from five properties and each one had significant increases in rates.
Some owners are now facing the frightening prospect of not being able to afford to live in their homes if the increases continue.
When you add the Body Corporate Levies to the Rates, the amount that Unit owners are paying just to live in their homes is getting out of hand.
Of the five properties in the sample, the cost of rates plus Body Corporate levies amounts to between $175.00 and $200.00 per week. Many other owners face much higher Body Corporate levies which push the overall cost up to $300.00 per week.
Many owners moved to Queensland to retire and they purchased units on the Gold Coast to live out their declining years. They understandably had no conception that increases in Rates and Levies could place their retirement dreams at risk.
Ralph, an elderly owner in Broadbeach, said “My combined Council and Water Rates have more than doubled in the ten years since I purchased the property. When I received the latest notices, I wondered how I would be able to find the money to pay them.”
Investors are also upset. Owners with portfolios of properties are facing significant increases. Those who rent out their properties would like to be able to pass on some of the increase in costs to their tenants but the market will not bear the increased costs.
Those owners with Units in a Holiday Letting Pool are also affected. One owner of a luxury unit in Palm Beach gave me the beakup of costs versus rent:
- Body Corporate Levies 115.00 per week.
- Council Rates 35.00 per week
- Water Rates 27.00 per week
That makes a total of 177.00 per week. The owner paid 800,000.00 for his property. Average rent in the holiday pool works out at a gross of 450.00 per week over a year.
He pays for Cable TV, Cleaning, Commissions and has the unit fully furnished. He also pays for Electirity. He has ducted air conditioning in the Unit and the tenants often leave the air conditioning on all the time resulting in high electricity bills.
The bottom line is that the owner is coming away with an appalling return on his investment while his unit is deteriorating through wear and tear.
Investors look at the sums and see that they just don’t add up. The reality is that investing in Body Corporate Communities on the Gold Coast is not a wise move at the moment.
Gold Coast Mayor Tom Tate wants people to invest in the Gold Coast. Well, if Council and Water rates continue to increase along with other associated expenses, investors will be bailing out and leaving the Coast in droves.
If you are concerned about the Gold Coast Council Rate increase you should contact the Gold Coast City Council preferably in writing.