Brisbane rental market tightens to 2.1% vacancy rate in March quarter with rents rising
By Alistair Walsh
The Brisbane residential rental market swung further in favour of landlords in the March quarter with the vacancy rate tightening from 2.2% to 2.1%.
A balanced rental market is said to be at a vacancy rate of 3% with anything below that benchmark suggesting landlords have the upper hand in rental negotiations due to a shortage of available rental accommodation.
The vacancy rate remained tightest in the inner city – suburbs within 5 kilometres of the CBD – but unchanged at 2%.
A year ago the vacancy rate in the inner city was 1.4% reflecting perhaps the completion of a number of apartment projects in the inner ring.
“The addition of new apartments and a slight increase in investor activity should hopefully see vacancy rates ease over the coming year,” said REIQ chair Pamela Bennett.
“Recent data from the Residential Tenancies Authority (RTA) shows that median rental prices increased between December and March, with three bedroom houses up $10 to $410 per week and two bedroom units up $5 to $395 per week. The median rent for a four bedroom house increased by $20, now at $500 per week,” she added.
Of the 10 rental markets surrounding Brisbane, seven remain “tight” with only Caboolture, Redcliffe and Bay Islands considered “healthy” rental markets.
“Ipswich City was the only region not to record any movement in its vacancy rate, unchanged at 2.1% as at the end of March and consistent with agents commenting on strong demand,” said Bennett.“Logan City’s vacancy rate dipped slightly 2.3%, down from 2.5% recorded for the end of December.
According to agents, people are moving to the region from other parts of Queensland and interstate.
“The vacancy rate for the Moreton Bay region remained steady, recording a vacancy rate of 2.4% as at the end of March. RTA median rental data showed median rents rose by $5 for both three and four bedroom house, now at $330 and $380 respectively.
“Vacancy levels decreased in the Redland City region overall, now at 1.2% as at the end of March. On the mainland, vacancy rates fell to 0.9%, as REIQ accredited agents have found that demand has been higher than normal, and new tenants were being approved even before the previous tenant had vacated.
Only one market – the Southern Moreton Bay Islands, incorporating Russell, Karragarra, Lamb and Macleay Islands – has a vacancy rate of 3.9%. This is up from 2.2% in December 2012 reflecting seasonal demand for holiday rentals. The March vacancy rate is well down on the 8.8% vacancy rate a year ago.
The REIQ notes that the bay islands area saw some holiday rentals being marketed instead as residential rental properties,” partially influencing an increase in the area’s vacancy rate to 3.9%.
While the rental market remains constrained, some REIQ accredited agents have noted lower demand within specific areas now that the academic intake period has ceased.
“Even though the academic calendar is in full swing, the Brisbane rental market remains competitive with about two to five applications per rental listing,” said REIA chief execurive Anton Kardash.
“Part of the reason why the market is certainly a case of more demand than supply is that first home buyers are largely remaining on the sidelines of the sales market following the removal of the First Home Owners Grant last year.”