Figures from the REIQ show that over the December 2015 quarter, Brisbane’s inner city vacancy rate increased to 3.8% over the three months, up from the 3.4% recorded during the September quarter.
While the increase pushed the inner city market above the 3.6% threshold that the REIQ classes as weak rental market and concerns about oversupply in the inner city have become common, chief executive officer Antonia Mercorella said the increase is little to worry about.
“Twelve months ago, in December 2014, the vacancy rate was 3.8% - exactly the same as it is in this survey, December 2015 – and in the March quarter it returned to 3.1%. In December 2013 the vacancy rate rose to 4.1% and then the next quarter it fell to 3.1%,” Mercorella said.
“So we can see the December quarter has a history of easing before vacancy rates return to normal in the New Year, probably as people re-locate over the Christmas period, and we expect the March quarter 2016 will follow this trend,” Ms Mercorella said.
Overall, Brisbane’s city wide vacancy rate also increased over the quarter, up to 3.1% from 2.8%.
The city’s middle ring of suburbs did buck the trend though, with its vacancy rate tightening from 2.4% to 2.1%.
Outside of Brisbane, the December quarter was a mixed one for Queensland.
Tipped by many to be a strong performing market this year, the Gold Coast saw its vacancy rate drop to the lowest level on record at 1.1%, though Mercorella said that is unlikely to be a permanent result.
“As we get closer to 2018 and the Commonwealth Games our expectation is that more accommodation will become available and that rate will ease slightly,” she said.
“However, the Gold Coast is a really vibrant, busy part of Queensland at the moment and even after the Games have finished we expect its popularity to remain strong, attracting interstate investors and residents in a steady stream.”
Staying in the state’s south east corner, the tightest rental market in Queensland is found in Noosa at just 0.7%, while the vacancy rate across the entire Sunshine Coast sits at 1.3%.
Toowoomba didn’t fare quite so well over the quarter, with its vacancy rate easing from 2.7% to 3.2%.
Moving to the state’s regional areas, many of which have been hit by the slowdown in the resource sector, there is some positivity despite vacancy rates remaining high.
“The weak markets throughout the coastal centres have all stabilised, to a degree, and we are optimistic that the bottom has been met in most areas,” Mercorella said.
“We know that the resources downturn will continue to be felt while those cities and towns find new sources of revenue on which to base their economy, but we are confident that will begin to happen soon.”
Bundaberg was the best performing regional centre, with its vacancy rate tightening from 4.6% to 3.9%.
Rockhampton’s vacancy rate moved higher from 4.5% to 6.1%, while Townsville saw a 0.8% increase from 5.6% to 6.4%.
Already home to the highest vacancy rates in Queensland, Mackay (9.3%) Gladstone (10%) saw further weakening in their rental market.
Cairns has continued to show it currently has a strong rental market, with its vacancy rate moving from 2.6% to 2.5% over the quarter, moving it into what the REIQ classifies as a tight rental market. .
“Cairns is benefitting from increased tourism numbers at the moment, along with the foresight to host regional conferences that attract visitors and raise the city’s profile on the regional stage,” Mercorella said.
“With a number of significant proposals in the pipeline, specifically Aquis Resort, there is clearly much confidence in the Cairns market at the moment and that has flowed through to the rental market,” she said.
