Rental property pool "insufficient and under incredible strain"
The rental market in Queensland remained highly competitive and tight throughout the December 2023 quarter, according to the latest Residential Vacancy Rate Report released by the Real Estate Institute of Queensland.
The statewide vacancy rate in Queensland slightly dipped to 0.9% during the quarter, reflecting a consistent trend observed throughout 2023. Of the 50 local government areas (LGAs) and sub-regions covered in the report, 22 experienced tighter conditions, 13 remained unchanged, and 15 relaxed to some extent, although not significantly.
The majority of markets in Queensland were classified as "tight" by the REIQ, with vacancy rates up to 2.5%. More than half of these markets had vacancy rates of 1% or below, REIQ reported.
Demand for private rentals and social housing waitlist
Property managers in Queensland have witnessed sustained demand for private rentals, while the social housing waitlist climbed to 43,000 Queenslanders in the September 2023 quarter.
REIQ CEO Antonia Mercorella expressed concern about the insufficient supply of rental properties.
“What we’ve seen over the course of the year, is a rental property pool that’s insufficient and under incredible strain,” Mercorella said. “It’s not necessarily that rentals are impossible to find everywhere in our state, it’s the imbalance between the sheer demand and shortage of supply of rentals at certain price points and locations that’s out of kilter. Many are finding it’s a lot less hassle to renew their existing lease than to risk re-entering the fast-moving market, especially if they are attached to their area.”
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Mercorella also acknowledged the tough conditions faced by vulnerable individuals and families, as inadequate social housing stock contributes to the situation.
“While we welcome initiatives such as the purchase of a hotel in South Brisbane to provide housing to those in need, the built-up demand is clearly far greater than the rate of social housing delivery,” she said.
She pointed out that only 269 social houses were completed in Queensland in the year leading up to September 2023.
Outlook for 2024
Looking ahead to 2024, Mercorella stated that it is difficult to anticipate a significant turnaround in rental availability.
“There are many predicting that the worst is yet to come, and while we remain hopeful, it’s hard to see meaningful reprieve any time soon, as cost of living pressures continue to climb for both renters and lessors,” she said.
Regional variations in vacancy rates
The Cook Shire in the north and Goondiwindi in the south shared the title of having the tightest rental market in Queensland, with a virtually non-existent vacancy rate of zero percent. Other areas with extremely low vacancy rates included Banana, Southern Downs, Maranoa, Tablelands, and Charters Towers, all ranging from 0.2% to 0.6%.
Mount Isa stood out as an outlier with a relatively balanced market, boasting a vacancy rate of 2.7%. The Cassowary Coast, Isaac, and Whitsunday regions improved slightly over the quarter but remained in tight territory, while other areas experienced minimal relaxation in vacancy rates.
Greater Brisbane area and coastal markets
In the Greater Brisbane area, most LGAs and sub-regions hovered around the 1% vacancy mark, with Brisbane LGA, Ipswich, Logan, Caboolture, Pine Rivers, and Redland ranging from 0.7% to 1.2%. Moreton Bay and Redland's Mainland were even tighter, while Redcliffe had the lowest vacancy rate in the region at 0.5%.
Coastal markets, including the Sunshine Coast, Hinterland, Caloundra Coast, and Maroochy Coast, experienced a slight retraction in vacancy rates, ranging from 0.7% to 0.9%. The Gold Coast also tightened slightly to 0.9%. Notably, Noosa had a vacancy rate of 1.4%, which represented the area's tightest vacancy rate in 2023.
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