Despite ongoing reports of oversupply in some Brisbane suburbs, multiple real estate markets in Queensland are experiencing ‘very tight’ rental vacancy rates. However, these could be under threat.
The Real Estate Institute of Queensland (REIQ) has released its Vacancy Rate Report for the March quarter of 2016, which revealed that areas such as the Gold Coast, the Sunshine Coast, Ipswich, Caboolture, Caloundra and Noosa are all experiencing vacancy rates of less than 2 per cent.
Antonia Mercorella, CEO of REIQ, said the data showed that specific markets in Queensland were “crying out for greater investment and more housing construction”.
“Gold Coast vacancy rates have been operating at less than 2.5 per cent for more than two years, and this is clear evidence that there is continuing strong rental demand,” she said.
“The Sunshine Coast has had tight conditions for more than four years, and rental accommodation can be very challenging to find. This area could support new dwelling construction.”
Contrary to other reports, the REIQ said that while Brisbane’s vacancy rates are not as tight as those in other areas of Queensland, the capital city is far from experiencing a state of oversupply.
Brisbane’s CBD recorded a drop in vacancy rates from 3.1 per cent to 3.0, the city’s inner five-kilometre ring is at 3.3 per cent and the middle ring is at 2.5 per cent.
“These levels continue to fall within what the REIQ considers the healthy range,” Ms Mercorella said.
“We are clearly not oversupplied – at this stage.”
Given the tight conditions, Ms Mercorella said the current negative gearing debate is a cause for concern.
“With the national debate focused on negative gearing it’s important to remember that negative gearing has been critical in maintaining a supply of investors to the market who provide rental accommodation, and this has also helped keep rent levels in check,” she said.
“Negative gearing has contributed to rental affordability and this directly benefits the one-third of Queenslanders who rent,” she said.