Rental growth ahead for Brisbane

By webmaster 01 March 2012 | 1 minute read

Brisbane will see the rental market tighten with yields expect to increase, according to a new report from a leading industry forecaster.

The Inner Brisbane Apartments 2011 to 2018 report from BIS Shrapnel explained that with an increase in tenants,

Brisbane will see the rental market tighten with yields expect to increase as tenant demand returns while construction lags from growing employment in the CBD and CBD fringe, concerns about any oversupply are unfounded.

This will be a boost for investors in the region, said BIS Shrapnel senior project manager and report author Angie Zigomanis.

“The tightening vacancy rates will drive acceleration in rental growth for apartments, which in turn will result in improved yields and a strengthening in off-the-plan purchaser demand,” said Mr Zigomanis.

“Price growth will also follow as investors subsequently enter the market in greater numbers, particularly once there is evidence that the Brisbane residential market has bottomed out,” he said.

While supply will be provided, with an increase in off-the-plan sales driving this, due to the lag from commencement to build investors will see a tightening of the market until 2013/14.

Recent high vacancy rates in inner Brisbane were due to the drop in demand during the GFC, said Mr Zigomanis, instead of a result of an oversupply.

“Tenant demand was so weak that it was unable to even absorb new apartment completions that had fallen to 15-year lows,” said Zigomanis.

Investors would also be wise to remember the two strong groups driving the demand for apartment rentals in inner Brisbane – Under 40 white collar employees, and students from overseas.

“Although growth in overseas student numbers is still expected to remain limited due to the high dollar, white collar employment in central Brisbane is poised to recover quickly as jobs are created to support the rising investment in coal seam gas projects in regional Queensland,” said Zigomanis.

Rental growth ahead for Brisbane
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