Record-low rates, government support and stimulus measures ,and the pandemic-driven rush north by Melburnians and Sydneysiders have turbo-charged the recovery under way in Brisbane’s private rental market, pushing the vacancy rate down to a near nine-year low.
Greater Brisbane’s rental vacancy rate fell to 1.5 per cent last month from 1.7 per cent in January and was well down from 2.2 per cent a year earlier, new figures from consultancy SQM Research show, driving the overall rate in the Queensland capital to a level it last touched in July 2012.
The population growth that saw the Sunshine State gain a net 7237 people from interstate in the September quarter – while NSW shed 4110 and Victoria lost 3749 – has compounded a recovery that was already under way after the apartment-building boom triggered a private rental market vacancy rate that REIQ figures show peaked at 4.1 per cent in December 2016.
“Over 2020 there was a real acceleration in interstate migration towards Queensland and generally speaking, Brisbane is the first port of call in Queensland,” SQM managing director Louis Christopher said.
“Queensland was picking up Victorian residents – when they were allowed in, of course – they were picking up residents from Sydney and so I believe that there’s been an acceleration. But construction and dwelling completions haven’t yet responded. This is what’s leading the rental vacancy downwards.”
The tight market is already stimulating more development. Red & Co founder David Laverty, who last month acquired a $4.75 million development site in inner-city Albion, said rising rents were a leading indicator of rising capital values.
The latest official figures show that over the 12 months to January, Queensland new dwelling approvals, which troughed in July last year at 29,783 picked up to 33,836, the highest total since May 2019.
“It’s not really a natural cycle because no one really predicted we were going to have this massive boom,” said Brisbane-based Asti Mardiasmo, the chief economist of PRD Nationwide.
No one really predicted we were going to have this massive boom.— PRD Nationwide economist Asti Mardiasmo
“If you remember at the beginning of 2020 we were all saying the market is going strong at the moment ... then the pandemic happened and everyone predicted we were going to crash. Then the government intervened and the RBA intervened.
“Because of these interventions, it has created an extraordinary cycle in the housing market. No one predicted we were going to be seeing double-digit price increases in some areas. No one predicted that rental prices will be increasing.”
Greater Brisbane had 12,332 properties for rent in January last year, when over 6000 units and houses were vacant, SQM figures show. After dropping to 9644 rental properties on market in March last year, the figure jumped back over 11,500 in April, likely boosted by owners of short-stay rentals putting their homes on the long-stay market, Mr Christopher said.
The city had 7378 vacant properties last week, comprising 4306 units and 3072 houses.
But while the fast-recovering market and the factors underpinning it have prevented many of the initial worries, particularly for renters, from being realised, it has also created new concerns for them.
“At the beginning of the pandemic, everyone was scared about whether or not they were going to have a place to live because they might be losing their jobs and couldn’t afford to stay in their place,” Dr Mardiasmo said.
“Now, people can’t find a place to live because there are too many people looking for somewhere to live. There is not enough supply and rental prices have gone up. It’s really ironic.”
Source: Financial Review AU
