2209/25 Anderson Street, Kangaroo Point, is up for rent at $425 a week.
Landlords who stuck it out through Queensland’s latest period of rental oversupply are set to win after vacancy rates tighten across the state, sparking rent rises.
Figures released by the Real Estate Institute of Queensland (REIQ) show that the majority of the state is sitting on tight vacancy rates, with regional cities experiencing the first rent rises in years.
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REIQ head Antonia Mercorella said Queensland had a very high rental population at present (about 35 per cent), exacerbated by COVID-19.
As interstate migration grows post the pandemic, Ms Mercorella said she expected rental demand to rise further.
Regional areas are experiencing rent rises for the first time in years. Four-bedroom 18 Macquarie Street, Jensen, is for rent for $800 a week through Explore Property.
“When you think about how Queensland has fared and how much more affordable it is over Sydney and Melbourne, I think we are going to see more people, particularly from southern states, move here. There’s greater affordability, terrific liveability, demand will rise in the post COVID world.”
She said the tighter vacancy rates demonstrated the cyclical nature of the market.
“It was not that long ago that I was talking about very weak vacancy rates and weak demand and yet here we are, not long after, looking at a different picture.”
She said it was pleasing for landlords who have had to drop their rental asking prices in the past few years.
“It’s nice to see that those landlords are perhaps being rewarded. When you are in an area where vacancy rates are tight, it does mean competitive, limited supply and therefore higher rents and the chances of negotiating rent reductions are reduced.
“Most of Queensland is classified as tight now,” she said. “It definitely is more advantageous for the owner.”
Among the patterns that have emerged through COVID-19 is an increase in fly-in fly-out workers staying in regional cities to maintain jobs, and families moving to be closer together.
Ms Mercorella said there was a need for greater rental supply.
“So many renters do rely on private owners, and mum and dad investors to provide rental accommodation for them. It demonstrates a need to meet rental demand.”
One area where tenants have maintained the upper hand is in Brisbane’s inner ring, within 5km of the CBD, where the vacancy rate is comparatively weak at 3.9 per cent.
In those areas rents could get cheaper, according to Ms Mercorella, giving tenants the opportunity to lock-in good rates longer term.
“Certainly in those areas there is more availability,” she said. This is down to a higher level of apartments in those locations but also the fact that a lot of stock that was originally short-term holiday rentals have come into the long-term market.
“Because of COVID-19 and the inability of people to travel, some owners have decided to transfer from short-term lets to the long-term market. Then there are properties vacant because of students going back home to live with mum and dad and universities going online.”
Residential vacancy rates:
LGA Mar-20 Jun-20
Greater Brisbane 2.0% 2.0%
Brisbane LGA 2.1% 3.2%
Inner (0-5km) 2.7% 3.9%
Middle (5-20km) 1.8% 2.4%
Outer Brisbane² 1.8% 1.7%
Ipswich 2.0% 1.9%
Logan 2.0% 2.2%
Moreton Bay 1.7% 1.4%
Caboolture 0.8% 1.2%
Pine Rivers 2.0% 1.7%
Redcliffe 2.0% 1.6%
Redland 1.5% 1.3%
Mainland 0.9% 1.7%
Bay Islands 4.3% 1.2%
Gold Coast 3.0% 3.0%
Sunshine Coast SD 1.8% 2.0%
Sunshine Coast^ 1.4% 1.9%
Caloundra Coast 1.0% 1.4%
Maroochy Coast 1.4% 2.1%
Hinterland^ 1.5% 2.1%
Noosa^ 3.6% 2.4%
Fraser Coast 3.1% 1.2%
Hervey Bay 4.3% 1.6%
Maryborough 1.2% 0.4%
Cairns 3.5% 2.4%
Source: REIQ
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