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Queensland’s rental market continues to be a battlefield for tenants, as vacancy rates remain significantly below levels considered by the state’s peak real estate body as “healthy”.
The latest data from the Real Estate Institute of Queensland (REIQ) showed the severity of the state’s rental crisis, as vacancy rates in the vast majority of the State continued to be below 1 per cent at the end of June quarter.
According to the institute, vacancy rates below 2.5 per cent indicated a tight market, while rental markets with vacancies of 2.6 per cent to 3.5 per cent showed a balance between supply and demand.
On the other end of the spectrum, a vacancy rate of 3.6 per cent and above characterised a “weak” rental market.
Competition for rental vacancies in the inner-city areas was particularly fierce, REIQ noted.
Inner-city suburbs recorded a vacancy rate of just 1 per cent, reflecting a 0.5 percentage point decline on a quarterly basis. Brisbane local government area (LGA) dragged on the inner-city area’s overall vacancy rates after reaching a new low of just 0.8 per cent during the period.
REIQ chief executive Antonia Mercorella said that the fact inner-city Brisbane’s rental market grew significantly tighter this quarter is a staunch indicator 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.
REIQ also reported anaemic levels of rental supplies in outer Brisbane areas, as the average vacancy rates in the area’s markets contracted by 0.1 per cent.
Data showed that the tightest rental markets in the outer Brisbane area were Logan LGA (0.6 per cent), Moreton Bay LGA (0.4 per cent) and the Pine Rivers Shire area (0.5 per cent).
Interestingly, REIQ noted that some regions – particularly on the coasts – saw gains in rental vacancy rates albeit marginal.
Data showed positive shifts were observed in coastal holiday markets such as Noosa (1.1 per cent), Caloundra Coast (0.9 per cent), and Sunshine Coast statistical division (SD) (0.8 per cent).
Despite the uniform 0.3 per cent uptick in vacancy levels recorded in these coastal markets during the quarter, REIQ highlighted that the mentioned areas remained in the unhealthy territory.
Commenting on the figures, Ms Mercorella 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 three-month period.
“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,” she stated.
The institute’s latest report showed that other tourism centres maintained their tight vacancy rates during the period, with the exception of slight increases limited to 0.1 per cent in Gold Coast (0.5 per cent), Sunshine Coast LGA (0.6 per cent), Maroochy Coast (0.5 per cent), Hinterland (0.5 per cent ), and the Whitsundays (0.8 per cent).
Out of all the regions in the state, and Southern Downs rental markets were the tightest, with vacancy rates in the areas at 0.1 per cent.
REIQ pointed out that the only healthy rental market in the state is Redland’s Bay Island, which posted a quarterly vacancy rate of 3.2 per cent.
Low vacancy rates ‘taking a toll’ on Queenslanders
Ms Mercorella said after consecutive quarters of drastically low vacancy rates, desperate tenants are closing in on the end of their ropes.
“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.
She said that real estate agents have reported that incredibly tight vacancy rates in regional areas have made it more difficult for healthcare workers, teaching staff and students to secure a place to live that is in proximity to their place of work or study.
Ms Mercorella underlined the need to address this issue that will inevitably impact the state’s economic stability if unresolved.
“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,” Ms Mercorella said.
Additionally, Ms Mercorella said the tight rental market is creating stress not just for tenants, but property managers as well.
“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.
Ms Mercorella also warned that the stiff competition among renters comes with a new set of cyber risks.
“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,” Ms Mercorella said.
She advised tenants searching for a rental vacancy to keep their eyes peeled and not to fall for rental scams.
“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,” Ms Mercorella stated.
The REIQ executive has called out on the government to address the rental crisis in the state, stating that people are “slipping through the cracks in the growing queues for social housing”.
“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,” Ms Mercorella said.
She emphasised that creative solutions need to be put on the table and into action to revive the state’s dangerously low vacancy rates, calling for “a genuine long-term plan for housing our population now and into the future.”