There is a glut of units in Brisbane’s inner city, sitting empty as owners struggle to find tenants.
Brisbane recorded a 3.2 per cent vacancy rate in May, up from 3 per cent year on year, Domain Group data revealed.
The figures showed a continued upward trajectory of apartment vacancies at the centre of the inner-city building boom.
New Farm had the most unit vacancies, with 109 apartments advertised for rent, and recorded a median rental price of $400 per week.
Brisbane City had 95 vacancies and a median price of $550 per week, and South Brisbane had 94 vacancies and a cheaper median price of $490 per week.
Other suburbs including Nundah, Fortitude Valley, Toowong and Hamilton,all recorded more than 70 rental listings in May. However, Toowong was the cheapest of the bunch with median rentals at $395 per week.
No. of vacancies
Chermside, Kangaroo Point and Indooroopilly also had high vacancies numbers with more than 60 rental listings. The cheapest was Chermside with a median of $393 per week; the most expensive was Kangaroo Point at $450.
“Brisbane continues to be a favourable market for tenants,” Dr Wilson said.
“We are seeing the building boom is pushing more units into the inner city, which is also driving down the price of apartments.
“Once vacancy rates move above 3 per cent, you really enter that over-supplied market where you find much more choice for rentals.”
Older apartment investors are having to renovate or lower their prices to secure tenants.
LJ Hooker New Farm principal Brett Greensill said New Farm investors had two options to attracts tenants.
“We are seeing a lot of small renovations in New Farm, where investors are modernising, because it is either renovate or drop prices,” Mr Greensill said.
“There have been drops of up to 20 per cent, but it isn’t as bad as you might expect.
“A big reason for the high vacancy rates, is people taking advantage of low interest rates and are taking a mortgage out in other affordable suburbs.”
The house rental market contrasted the unit market, with vacancy rates slightly tightening by 0.1 per cent to 2.5 per cent in May.
However, Dr Wilson said Brisbane still had the second-highest house vacancies in the country.
“Darwin has seen a major improvement, leaving only Perth above Brisbane for house vacancies,” he said.
North Lakes had the highest house rental vacancies in May with 93, followed by Redbank Plains with 88.
Original article published at www.domain.com.au by Jason Quelch, 15/6/16