- The national rental vacancy rate is just 1%
- Investors taking advantage of high prices to offload holdings
- Situation likely to worsen given overseas migration over the next few years
With an ongoing rental shortage nationally, buyers agent Grant Foley has argued this has been caused by investors selling their rental properties, a trend that has emerged since the pandemic began, in light of higher property prices.
The latest data from SQM Research shows the national residential property rental vacancy rate fell to just 1% in May – a 16-year low.
National
“Many investors choose to take advantage of the rising market conditions to offload their holdings, especially in locations where there had been negligible price growth in the years before,” Mr Foley said.
“This has certainly been the case in parts of Greater Brisbane, where many investors had experienced underwhelming capital growth for many years, so when prices started to firm, they opted to sell rather than retain their properties.”
Grant Foley, Grant Foley Property director
“I believe this is one of the reasons why the vacancy rate in Brisbane is just 0.7 per cent.”
Brisbane
Mr Foley added investors in other locations were using the strong market conditions to sell down their portfolios.
“Many Sydney investors also offloaded their properties to some of huge volume of homebuyers that transacted in the Harbour City in 2021, he said.
“A number of investment properties in Sydney, especially houses in more affluent areas, were sold to upgrading homebuyers, which means that it is nearly impossible for families to find a house to rent in these locations at present,” Mr Foley said.
“We are expecting overseas migration to soar over coming years, compounding the rental crisis, especially in Sydney, which is where the majority of migrants ultimately arrive.”
Mr Foley concluded his remarks by noting that investor activity had been well below historical averages for several years until recently, which had caused a decrease in the supply of rental properties.
Additionally, he said, there had been a reduction in household sizes as share houses became less appealing during the pandemic.
