Queensland rental market remains under ‘squeeze’
The rental supply squeeze has kept a tight grip on Queensland, despite some slight increases in vacancies on the coasts, according to the Real Estate Institute of Queensland’s (REIQ) latest report.
The REIQ’s Residential Vacancy Report for the June Quarter 2022, released today, showed the vast majority of Queensland continues to endure incredibly tight and relatively flat vacancy rates, well below one percent, a far cry from a healthy 2.6 – 3.5 percent range.
Brisbane Local Government Area (LGA) vacancies dropped to a new low of just 0.8 percent with fewer options for renters than ever before, dragged into even tighter territory by the inner-city suburbs (1%) which had a significant fall of 0.5 percent this quarter.
The rental market also contracted ever-so-slightly in outer Brisbane areas by just 0.1 percent in Logan LGA (0.6%), Moreton Bay LGA (0.4%) and the Pine Rivers Shire area (0.5%).
However, interestingly some positive shifts were observed in coastal holiday markets such as Noosa (1.1%), Caloundra Coast (0.9%), and Sunshine Coast Statistical Division (SD) (0.8%) – all easing by 0.3 percent or more towards a slightly healthier rate.
Other tourism centres maintained fairly steady vacancy rates over the quarter with slight increases restricted to 0.1 percent in Gold Coast (0.5%), Sunshine Coast LGA (0.6%), Maroochy Coast (0.5%), Hinterland (0.5%), and the Whitsundays (0.8%).
Hervey Bay (0.6%) took a small step backwards retracting 0.2 percent, while Fraser Coast (0.5%), Bundaberg (0.4%), and Cairns (0.5%) held rock steady over the quarter. In the regions, Burdekin in North Queensland had the most notable drop, halving to 0.5 percent.
The Goondiwindi Region dropped to a rock bottom 0.1% following a gradual decline over the last four quarters, joining the Southern Downs Region (also 0.1%) as the tightest rental markets in the state – both within the Darling Downs along the state’s border with New South Wales.
The Tablelands rose fractionally to 0.2 percent – back in the same boat as Maryborough which stayed put at 0.2 percent after two years of virtually no vacancies. The neighbouring regions of Gympie and South Burnett both rose slightly to 0.3 percent and have hovered around this barely-above-zero mark over the last four quarters.
Banana (0.5%), Charters Towers (0.4%), and Isaac (1%) all fell -0.2% over the quarter. While Gladstone (1%), Mackay (0.5%), Townsville (0.5%), Cassowary Coast (0.8%), Central Highlands (0.6%), Livingstone (0.4%), Mareeba (0.3%), and Mount Isa (1.1%), all experienced minor reductions of just 0.1 percent.
Rockhampton (0.4%), Toowoomba (0.3%), Cook (0.4%), Lockyer Valley (0.5%), Maranoa (0.6%), Scenic Rim (0.5%), all plateaued with no movement over the June quarter.
REIQ CEO Antonia Mercorella said quarter after quarter of drastically low vacancy rates were taking their toll on Queensland.
“Queenslanders have been enduring these wafer-thin vacancy rates for some time now and these conditions are understandably having both social and economic ramifications,” Ms Mercorella said.
“Real estate agents in regional parts of Queensland have reported that incredibly tight vacancy rates are making it tough for hospital workers, teaching staff, and students to find a place to live in proximity to their essential work or study.
“These people bring skills and spending to the regions, all contributing to the economic prosperity and social fabric of the area, and it’s a truly concerning loss to these communities when they simply cannot house them.
“People are also slipping through the cracks in the growing queues for social housing, and there’s no doubt that the Government’s poor planning and lack of forecasting for our future needs has played a fairly significant role in where we find ourselves today.
“What we need now is creative solutions to breathe the life back into our flatlining vacancy rates and a genuine long-term plan for housing our population now and into the future.”
Ms Mercorella said the fact inner-city Brisbane’s rental market grew significantly tighter this quarter could be a sign of just how depleted supply in the capital city had become.
“Typically, inner-city apartment supply is more bountiful and keeps Brisbane’s vacancy rate quite buoyant, but what we’re seeing now, is that even this market is being filled to the brim,” she said.
She said the relaxation of tight vacancy rates in some of Queensland’s coastal areas was perplexing and it would be interesting to see if these markets continued to ease up over the next quarter.
“Given we’ve seen a lot of properties in prime locations change hands off the back of very strong sales conditions, perhaps some of these are now coming on to the market as rentals.”
Ms Mercorella said the tight rental market is creating stress and tenants and property managers were feeling the strain.
“Chances are that for every property, there are multitudes of applicants who would make perfect tenants – however, the sad reality is that only one application for each property can be approved, and people are missing out simply because it’s so competitive,” she said.
“Often when the market is competitive, people are driven to look for rentals outside of traditional means, such as on social media, which can of course open up more options but comes with risk.
“It’s important to stay vigilant to rental scams ensuring that a property is legitimate and that the property owner is who they purport to be before transferring any monies – despicably, there are cyber criminals trying to take advantage of people who are desperate for a home, and a tell-tale sign can be a property advertised for far less than the average market rate of the area.
“With National Property Manager Day this Friday 22 July, I’d like to take the opportunity to thank the state’s great Property Managers for the valuable role they play in helping house Queenslanders.”
Fast facts: June Quarter 2022
- Tightest Vacancy Rate: 0.1% (Goondiwindi and Southern Downs)
- Highest Vacancy Rate: 3.2% (Redland’s Bay Islands), followed by 1.1% (Noosa and Mount Isa)
- Biggest fall: -0.5% (Brisbane inner-city suburbs and Burdekin)
- Biggest rise: +0.4% (Caloundra Coast and Redland’s Bay Islands)
The REIQ classes rental markets into three categories, tight, healthy, or weak. These markets are classified according to vacancy rates:
- 0 – 2.5% = tight
- 6 – 3.5% = healthy
- 6% – plus = weak
REIQ Members can access the full report via the membership portal.
Claire Ryan, Media and Stakeholder Relations Manager, The Real Estate Institute of Queensland
M: 0417 623 723 E: firstname.lastname@example.org