Vacancy rates across Queensland have dropped dramatically with several areas recording rates of 0.1 per cent.
Vacancy rates in regional NSW have also tightened, with Newcastle and the Hunter region among the most affected areas.
The Real Estate Institute Queensland’s (REIQ) Residential Vacancy Report for the March 2022 quarter showed 28 out of 50 local government areas and sub regions recorded record or equal record lows.
The state’s vacancy rate sat at 0.7 per cent, with tighter levels recorded in several areas.
The Tablelands Region in Far North Queensland, and the Southern Downs Region, along the boundary with New South Wales, posted the tightest vacancy rates in the state, at a low 0.1 per cent.
In regional areas such as South Burnett, Gympie and Goondiwindi, the vacancy rate dwindled to 0.2 per cent, representing a 10-year low in each of these regions.
Maryborough remained steady at 0.2 per cent, with minimal improvement from the previous quarter at 0.1 per cent.
Notably, Brisbane experienced the biggest drops. Inner Brisbane’s (0-5km) vacancy rate tumbled to 1.5 per cent, Middle Brisbane (5-20km) fell to 0.9 per cent, and Outer Brisbane dropped to 0.6 per cent.
REIQ Chief Executive Officer (CEO) Antonia Mercorella said the dramatic rental squeeze had led many tenants to consider moving back to inner Brisbane.
“While we continue to see regional markets gradually tightening, Brisbane’s vacancy rates have taken a dramatic dive this quarter, especially when looking at the 0-5km Inner Brisbane ring,” Ms Mercorella said.
Ms Mercorella said there were a number of reasons behind the shortage of rental properties.
“This drop could reflect the return of international students as well as hospitality and entertainment workers to the inner city, or simply prospective renters focusing their search in areas where the vacancy rate is healthier and they have more options and therefore better prospects,” she said.
“This drop could reflect the return of international students as well as hospitality and entertainment workers to the inner city, or simply prospective renters focusing their search in areas where the vacancy rate is healthier and they have more options and therefore better prospects.
“Queensland has also had a steep population boost from interstate migration, with those making the shift to the Sunshine State potentially deciding to start their life in the heart of the capital city.
“Yet another factor that’s added to the squeeze on rental stock during this quarter is the February flooding disaster displacing people from their homes.”
Ms Mercorella said with investors selling and the dominant purchasers being owner occupiers, more homes that were previously investment properties were effectively being removed from the rental market, shrinking an already scarce base of rental supply.
“With the second stage of rental reforms looming, the last thing we need right now in the midst of a rental crisis, is legislative reform which undermines investor confidence,” she said.
“With record low vacancy rates, and 36 per cent of our population renting their homes, we can’t afford to reduce the appeal of investing in Queensland.
“That’s why we’ll continue to advocate for fair and balanced legislation that maintains a level playing field for both investors and tenants.”
The vacancy rate across Sydney rose slightly in March, offering a small respite for renters.
After dropping for four consecutive months, the Sydney vacancy rate increased 0.1 per cent last month to 2.2 per cent according to Real Estate Institute of NSW (REINSW) figures.
REINSW CEO Tim McKibbin said overall vacancy rates were mixed across the city.
“Both the Middle and Outer Rings saw increases to 2.7 per cent (up 0.3 per cent) and 1.7 per cent (up 1.2 per cent) respectively,” Mr McKibbin said.
“Vacancies in the Inner Ring decreased 0.2 per cent to be 2.6 per cent.”
Vacancy rates continued to be tight in the regional centres across the state.
“In Newcastle, vacancies fell by 0.4 per cent to be 1.9 per cent and the Hunter region overall dropped to 1 per cent (down 0.2 per cent),” he said.
“And while the rate for Wollongong rose by 0.3 per cent to 0.7 per cent for the month, a sharp decrease in vacancies across the rest of the region saw the Illawarra record a result of just 0.6 per cent, which is down from 1.1 per cent in February.”
Vacancy rates across the rest of regional NSW remained low.
“The Albury, Central West, Coffs Harbour, New England, Riverina and South East areas all recorded drops.,” Mr McKibbin said.
“Rates for the Central Coast, Mid-North Coast, Murrumbidgee, Northern Rivers and South Coast areas all rose.”
According to Mr McKibbin, sourcing rental stock continued to be an issue across all areas of the state.
“With the cost-of-living continuing to rise, our member agents are telling us about Mum and Dad investors who are selling their hard-earned investment properties just to pay their bills each month,” he said.
“With so little stock on the market, these properties are being snapped up by home buyers.
“The flow-on impact is the removal of these properties from the residential rental market.”