Queensland’s rental market has been hit hard by COVID-19, with Brisbane’s vacancy rate swinging from a high of 14 per cent to 8.8 cent in just four months. And the CBD is by far the most healthy area when it comes to conditions.
The Gold Coast hit 10 per cent vacancy back in May, at the height of the pandemic. Close to six months later, the southern areas of the Gold Coast have a median vacancy rate of 0.3 per cent, with the west averaging just one per cent.
Things are tight across the entire state.
According to the latest vacancy data issued by the Real Estate Institute of Queensland, 100 per cent of the state’s regions have experienced a drop in vacancies over the September quarter, with 96 per cent falling within a tight rental inventory range (0-2.5 per cent) and 4 per cent within a healthy rental inventory range (2.5-3.5 per cent) or above.
Figures show the Gold Coast in particular has a tight rental market – Burleigh Heads (0.4 per cent), Coolangatta (0.2 per cent), Currumbin (0.6 per cent), Palm Beach (0.1 per cent) and Miami (0.4 per cent) in the south; Mudgeeraba (0.4 per cent), Nerang (0.5 per cent) and Oxenford (0.3 per cent) in the west; Coomera (0.7 per cent), Helensvale (1.6 per cent), Hope Island (1.6 per cent), Southport (1.5 per cent), Pimpama (0.4 per cent) and Upper Coomera (0.7 per cent) in the north, and Surfers Paradise falling from 5 per cent to 2.1 per cent.
“With Queensland’s overall quarterly vacancy rate retracting from 2.44 per cent to 1.49 per cent over three months, this is the first time since the outbreak of COVID-19 that every market is showing growth, as vacancy rates continue to shrink,” REIQ CEO Antonia Mercorella revealed.
“Needless to say our rental market is under enormous pressure with around 90 per cent of the state now experiencing extremely tight conditions.”
Brisbane’s outer suburbs saw falls in rental vacancies overall (-0.6 per cent to 1.7 per cent), with Ipswich and Logan having the biggest reduction in rental stock, both dipping 0.7 per cent to 1.2 per cent and 1.5 per cent respectively
“The pandemic has definitely caused a shift for a lot of people in not only the way they want to live but where they want to live, and it seems southeast Queensland is our biggest beneficiary these last three months,” Ms Mercorella said.
“As more people choose to make Queensland their home, it’s imperative we act now to support and safeguard the rental housing needs of current and future generations.
“Over 36 per cent of Queensland’s population rent (1.2 million) and 90 per cent of that housing is provided by private owners.
“Given the current and future rental needs of the community, it’s critical we continue to attract property investors to improve supply and keep pace with demand and maintain rental affordability.”
Australian Bureau of Statistics data indicates new loan commitments in Queensland by property investors rose 20.3 per cent over the past four months, a sign of future health.
“While 2020 has been one of the most challenging years, property investors have endured the most during these unprecedented times of uncertainty,” Ms Mercorella explained.
“Private property owners provide the majority of Queensland’s rental housing to the state’s ever-growing tenant community, and are often incorrectly categorised as wealthy individuals hoarding far more than their fair share of real estate.
“The reality is however very different. These are ‘ordinary’ people comprising hard-working Australians including childcare workers, nurses and teachers, making up 77 per cent of one-property investors and earning less than $100,00 per year (with approximately 43 per cent of property investors earning less than $50,000).
“They have made financial sacrifices to improve their future position for retirement, which is still decades away for most investors.”
The average vacancy rate for Fraser Coast was 0.7 per cent – a record low for the region. Also experiencing record lows are Rockhampton at 0.3 per cent (its lowest ever), and Townsville, who hit a 10-year low with 0.7 per cent.
Earlier this month, data from analysis company Equifax revealed that nine of the 10 areas in Australia where the most mortgage freezes were granted are tourism spots in Queensland.
“For the first quarter results of 2020, I suggested that vacancy rates provided an optimistic start to the year and that further quarters would reveal more about the true impact of COVID-19 on the Queensland rental market,” Ms Mercorella added.
“Nobody could have predicted the extreme conditions our rental market is currently facing.
“Of particular concern for the future is the high incidence of affordability problems amongst low-income and older renters – cohorts that are projected to increase in the next two decades as a result of the effects of those currently excluded from home ownership – ongoing access constraints to this tenure, and a declining relative share of social rental housing.”