- Vacancy rates remained below 1% despite the uplift.
- Stock is shrinking as flood-affected properties come off the market, and investors exit due to regulatory environment and rising costs.
- More demand is being heaped on affordable rentals as prices continue to rise.
The Brisbane rental market has recorded a marginal easing in vacancy rates across November, according to the latest PropTrack data.
While vacancy rates remained sub-1%, at 0.88%, it was a month-on-month uptick of 0.02 percentage points.
“I feel that the easing of vacancy rates is a matter of timing and would expect to see a shift again in January,” Your Haven Realty director and principal, Nick Kruger, told The Property Tribune.
Quarterly, rates fell 0.02 percentage points, and annually, rates rose 0.02 percentage points. Since the pandemic began, available rentals in Brisbane plummeted, with vacancy rates falling 57% since March 2020.
A quieter December for Brisbane
December to February tends to see tenants changing their rental properties primarily due to moving jobs, states, schools and so forth, Sash & Gable Property business manager, Ian Gobey, told The Property Tribune.
“However, of note this year, we have not seen nearly so much movement across the properties we manage. I believe this may be due to the difficulties in identifying and securing an alternative property,” said Gobey.
“I believe this may be due to the difficulties in identifying and securing an alternative property. Many renters are turning to buying due to the amount of rent they are currently paying.
“We see this occur generally at the lower end of the market where there is a significant shortage of properties to purchase.”
Investors rethink rental, and flood affected properties off the market
Kruger explained that one reason behind the dwindling number of properties in Brisbane’s rental market was flooding.
“The Brisbane City Council buy-back scheme for flood-affected properties has seen a number of existing rentals taken off the market and sold back to council to be turned into parkland,” said Kruger.
“Combine this with the changes to rental laws in Queensland, it is making some property owners question whether property is still the best investment choice.”
Too expensive to rent, too costly to fix
A growing trend The Property Tribune has recently reported on is the growing cost of renting pushing many into buying homes instead.
Gobey has observed that trend for Brisbane but noted on the flip side, landlords may also be looking to sell up.
“The cost of maintenance has skyrocketed, and in some cases, is forcing owners to seriously consider selling – we have sold more rental properties in this last year than we have sold off in the previous 3 years,” Gobey told The Property Tribune.
Will renting get easier in the new year?
“While I believe vacancy rates have eased over the last few months, I suspect the busy months ahead will see figures change with the influx of properties coming back into the rental market,” said Kruger.
He added that demand will also be driven by university students looking for accommodation, people moving into the area for schools like BSSSC (Brisbane South State Secondary College), and professionals looking for accommodation close to the CBD.
One pocket that has seen more rentals come to market includes Rocklea, said Kruger. He suspects this is due to completed renovations or investors who have purchased in the suburb.
Gobey observed a trend where owners moved intrastate while renting out their Brisbane home.
“We have noticed a trend where properties in the middle of the market are coming to the rent roll,” Gobey said.
“This seems to be a result of owners not wishing to sell and retain properties in their super while they relocate to the Sunshine Coast. Due to the ease of working remotely, I think this trend will grow.”
Rental applications for affordable homes remain in the double digits
Both Gobey and Kruger observed that applications per rental varied largely by property and location.
Gobey said properties in the $450 to $600 per week bracket could expect to see 30 to 40 attendees and around 10 applications before the property is leased.
Up to $900 per week, Gobey observed attendance drop to between 15 and 20, with four to five applications.
Properties over $900 could see 10 attendees with two to three applications, even fewer for properties fetching $1,100 to $1,400 per week.
Kruger made similar observations:
“We recently had over 25 applications received on a two bedroom unit in Highgate Hill that was priced under $400, it was obviously very popular due to the price.”
“Other houses in the likes of Fairfield, listed between $650 and $750 have received five to 10 applications on average from a maximum of two open homes.
“Apartments and units are in greater demand due to the price point when compared to houses and townhomes.”
Gobey added that the rising cost of renting is leading many to seek more affordable rentals:
“Many tenants have taken on properties they could afford 12 to 18 months ago, however, are now unable to justify the rent they are paying, so looking to downgrade.”