After a number of years of fairly woeful market conditions, the Queensland rental market has officially turned a corner.
The Real Estate Institute of Queensland’s vacancy rate report for the March quarter showed most of the major regions across the state recorded vacancy rates below 3 per cent, which is to be the considered the equilibrium point of supply and demand.
A vacancy rate under 3 per cent generally means
more demand than supply of rental stock.
One of the standout performers over the period – while recording a vacancy rate of 3.1 per cent – was inner Brisbane, with tenant demand continuing to soak up the excess new unit supply of recent years.
“Inner Brisbane has been the focus of significant media attention for the past few years as considerable apartment supply has visibly overwhelmed demand levels,” REIQ CEO Antonia Mercorella said.
oversupply peaked in the March quarter of 2017, when the vacancy rate reached 4.4 per cent, and since then the rental market has tightened steadily.
“The March quarter is a more consistent indicator of where the market is performing, and this market is now in tight territory.”
It’s great news for Brisbane landlords, potentially signalling the end of what had been a tenants’ market for a number of years.
The median asking rent for Brisbane houses increased from $400 a week to $410 in the December quarter, lifting for the first time in nearly three years – and the latest
Domain howed those prices continued to hold strong over the first quarter of 2019. Rental Report s
It’s the same story for units, with the median weekly asking rent not going up over the quarter but it did record a slight rise since the same time last year. The median weekly asking rent for a Brisbane unit is now $380, up $5 a week from March 2018.
Elsewhere in Queensland,
rental markets have strengthened across the board. In Gladstone, the vacancy rate was down to 3.1 per cent, its healthiest result in about seven years.
“This quarter, Gladstone has stolen the spotlight with its long-awaited move into the healthy range, tightening from 4.2 per cent to 3.1 per cent, for the first time since December 2012,” REIQ Gladstone zone chair Alicia Williams said.
“This market has been gradually improving since it peaked at 11.3 per cent vacancies in March 2016.
“The inexorable downward trend has consistently suggested an improving market with rental supply and demand trends now the closest to intersecting in almost seven years.”
The impact of the Townsville floods in February was behind the dramatic drop in its vacancy rate over the March quarter.
Townsville’s vacancy rate decreased from 4.3 per cent to 1.5 per cent over the period, according to the data.
However, the undersupply was likely to only be temporary with the market slated to return to more moderate conditions in coming months, Townsville zone chair Wayne Nicholson said.
“Our forecast for the
Townsville market is that as rental stock returns to the marketplace, the vacancy rate will ease again, although we wouldn’t be surprised if it stabilises in the healthy range of 2.5 per cent to 3.5 per cent towards the end of the year and into early 2020,” he said.
Brisbane’s vacancy rate recorded no change to be 2.5 per cent over the March quarter, while the
Gold Coast remained in undersupply territory with a rate of 1.8 per cent.
The tightest vacancy rate of all major regions was the Fraser Coast with only 1.1 per cent of all rental properties vacant.
“Few rentals are advertised on popular listing portals and tenants are struggling for choice. Landlords definitely have the upper hand and local agents are telling us that they have multiple applicants per property,” Ms Mercorella said.