Incredibly tight rental conditions are continuing to ‘squeeze’ renters across Queensland, with many areas still experiencing vacancy rates below 1 per cent.
According to the Real Estate Institute of Queensland’s Residential Vacancy Report for the June Quarter 2022, the vacancy rate across Greater Brisbane is now at 0.6 per cent down from 0.7 per cent in the previous quarter.
This is well below the 2.6 to 3.5 per cent range considered to be a healthy rental market.
“Queenslanders have been enduring these wafer-thin vacancy rates for some time now and these conditions are understandably having both social and economic ramifications,” Ms Mercorella said.
Brisbane Local Government Area (LGA) vacancies dropped to a new low of just 0.8 per cent in the June quarter, dragged down by the inner-city suburbs (1 per cent) which had a significant fall of 0.5 per cent this quarter.
Ms Mercorella said the fact inner-city Brisbane’s rental market grew significantly tighter this quarter could be a sign of just how depleted supply in the capital city had become.
“Typically, inner-city apartment supply is more bountiful and keeps Brisbane’s vacancy rate quite buoyant, but what we’re seeing now, is that even this market is being filled to the brim,” she said.
The rental market also contracted ever-so-slightly in outer Brisbane areas by just 0.1 per cent in Logan LGA (0.6 per cent), Moreton Bay LGA (0.4 per cent) and the Pine Rivers Shire area (0.5 per cent).
However, interestingly some positive shifts were observed in coastal holiday markets such as Noosa (1.1 per cent), Caloundra Coast (0.9 per cent), and Sunshine Coast Statistical Division (SD) (0.8 per cent) – all easing by 0.3 per cent or more towards a slightly healthier rate.
Other tourism centres maintained fairly steady vacancy rates over the quarter with slight increases of 0.1 per cent on the Gold Coast (0.5 per cent), Sunshine Coast LGA (0.6 per cent), Maroochy Coast (0.5 per cent), Hinterland (0.5 per cent), and the Whitsundays (0.8 per cent).
Hervey Bay (0.6 per cent) took a small step backwards retracting 0.2 per cent, while Fraser Coast (0.5 per cent), Bundaberg (0.4 per cent), and Cairns (0.5 per cent) held rock steady over the quarter.
Ms Mercorella said the easing of tight vacancy rates in some of Queensland’s coastal areas was perplexing and it would be interesting to see if these markets continued to open up over the next quarter.
“Given we’ve seen a lot of properties in prime locations change hands off the back of very strong sales conditions, perhaps some of these are now coming on to the market as rentals,” she said.
Across regional Queensland, Burdekin in North Queensland had the most notable drop, halving to 0.5 per cent, however, many other locations are experiencing tight conditions putting extreme pressure on tenants.
“Real estate agents in regional parts of Queensland have reported that incredibly tight vacancy rates are making it tough for hospital workers, teaching staff, and students to find a place to live in proximity to their essential work or study,” Ms Mercorella said.
“These people bring skills and spending to the regions, all contributing to the economic prosperity and social fabric of the area, and it’s a truly concerning loss to these communities when they simply cannot house them.
“People are also slipping through the cracks in the growing queues for social housing, and there’s no doubt that the government’s poor planning and lack of forecasting for our future needs has played a fairly significant role in where we find ourselves today.”
The Goondiwindi Region dropped to a rock bottom 0.1 per cent following a gradual decline over the last four quarters, joining the Southern Downs Region (also 0.1 per cent) as the tightest rental markets in the state – both within the Darling Downs along the state’s border with New South Wales.
The Tablelands rose fractionally to 0.2 per cent, which put it back in the same boat as Maryborough which stayed put at 0.2 per cent after two years of virtually no vacancies.
The neighbouring regions of Gympie and South Burnett both rose slightly to 0.3 per cent and have hovered around this barely-above-zero mark over the last four quarters.
Ms Mercorella said the tight rental market is creating stress and tenants and property managers were feeling the strain.
“Chances are, that for every property, there are multitudes of applicants who would make perfect tenants. However, the sad reality is that only one application for each property can be approved, and people are missing out simply because it’s so competitive,” she said.
“Often when the market is competitive, people are driven to look for rentals outside of traditional means, such as on social media, which can of course open up more options but comes with risk.
“It’s important to stay vigilant to rental scams ensuring that a property is legitimate and that the property owner is who they purport to be before transferring any monies.
“Despicably, there are cyber criminals trying to take advantage of people who are desperate for a home, and a tell-tale sign can be a property advertised for far less than the average market rate of the area.”