- Southeast Queensland is experiencing record-high rents and low vacancy rates
- Increasing rents prompt tenants to consider home ownership
- Property demand-supply imbalance driving the rental crisis
The surging cost of renting in Southeast Queensland (SEQ) is seeing more and more people looking to leave the rental market and consider buying according to an expert.
Builder AVID Property Group’s (AVID) Queensland General Manager Bruce Harper said that the desire to transition from tenant to homeowner is being felt more acutely in parts of SEQ where rental vacancy rates are at record lows and rents are at record highs, including Ipswich and Logan-Beaudesert.
Harper said the difference between what a young couple might be paying in rent each month versus a mortgage had narrowed substantially over the past year, despite interest rates being at a 10-year record high.
“We’ve heard from potential purchasers that their rents have increased by up to $200 per week in some outer Brisbane suburbs which adds an extra $10,000 to their annual housing costs,” said Harper.
“That’s a significant amount of extra money going towards their landlord which could be used to help pay off their own home.”
Rising rents
According to CoreLogic, rents across Queensland not including Brisbane saw an increase of 1.4% in the last quarter with the median rent now at $574 per week.
Regional Queensland’s vacancy rate sits around 1.3% which is considered very tight and it has been that way since November 2022.
In Ipswich, rental rates are floating around the high $400’s, according to SQM Research Data, with the latest yields around 4.2% to 4.7%.
Weekly asking rents for Ipswich
Property gross rental yield for Ipswich
Logan rental rates are floating between $350 and $470 per week, depending on property type, with yields between 5% and 7%.
Weekly asking rents for 4114 including Logan
Property gross rental yield for 4114 including Logan
First home buyers keen to buy
Harper said they have seen a number of first home buyers who are who are looking to leave the rental market in and around Logan and Brentwood Forest in Ipswich.
He said there have been buyer concerns about the rental crunch and what it meant for their future housing choices.
Harper said first-home buyers generally comprised the largest pool of tenants – followed by permanent interstate or international migrants – looking for property.
“Currently more than 70% of sales inquiries at Chambers Ridge – where completed homes start from $575,000 – are coming from first-home buyers.”.
Bruce Harper, AVID Queensland General Manager
“At Brentwood Forest – where completed homes start from $613,000 – 50% of inquiries are from first-home buyers.’’
Lack of supply
Harper said the imbalance in property demand and supply, which was at the root of the current rental crisis, stemmed from a lack of available, well-located greenfield land in Queensland’s SEQ growth corridor.
“It’s good to see the State Government has taken proactive steps through its Growth Areas Team to work towards unlocking more land to create new residential communities in collaboration with local councils, state agencies, utility providers, and the development industry.”
“The government’s commitment to review the SEQ Regional Plan – ShapingSEQ – is also a welcome chance to ensure the plan is updated and amended to reflect current population and dwelling growth trends to release land for residential developments in locations where people want to live.”
Harper said Queensland is Australia’s fastest-growing and most popular state.
“In the 12 months to September 2022 almost 47,000 people from other states and territories moved to Queensland – the highest of any other state – driving our annual population growth rate to a national high of 2.2 per cent.”
“An additional 43,000 international migrants also made Queensland home over the same period.”
