Rental markets tighten in the Sunshine State, and experts see good things on the horizon for the southeast
A Queensland suburb has taken the top spot in CoreLogic’s Top Rental Performers list. Country town Blackwater was named the best rental market in Australia as of September 2019. The suburb offers rental returns as high as 11.7% on average, while house prices are very low at a median of under $150,000. The market is now so tight there’s no more room for renters.
In fact, the Sunshine State dominated the Top Rental Performers report, claiming 42 out of 100 spots on the list.
The Real Estate Institute of Queensland (REIQ) confirmed these findings in its Rental Vacancy Rate Report for the June 2019 quarter, noting that markets had tightened and were stronger compared to the previous quarter. This indicates rising rental demand in this state.
The REIQ report highlighted the low vacancy rate of just 2.4% in Greater Brisbane. However, no Queensland rental market is tighter than Maryborough’s, which saw vacancy rates drop to 0.3% in the March quarter from 1.6% in September 2018. Vacancies are also very limited in the Fraser Coast region, where the average vacancy rate comes in at just 0.9%.
“The Gold Coast and Sunshine Coast have each enjoyed solid house price rises, benefiting from strong migration inflows and an undersupplied market. Vacancy rates are low, but supply is rising,” says BIS Oxford Economics’ associate director Angie Zigomanis.
“The greatest upside to house prices is expected to emerge in Brisbane, although it will not be immediate. Net interstate migration flows into Queensland have increased.”
With mining a slow industry these days in Queensland, tourism could be the sector to facilitate an uptick in the state’s economy. According to the CoreLogic CHIP (Cordell House Index Price) Report for July 2019, overseas investors are looking to construct largescale resorts in the northern part of the state, as well as new residential properties in 2020. This could foster population growth in the coming years.
However, Zigomanis does warn investors to be mindful of supply levels in Queensland.
“There remains an oversupply of dwellings in the state, mainly in the apartment sector, and any economic recovery in the state is yet to gain traction. This is forecast to keep any price rises modest in 2019/2020.”
SUBURB TO WATCH
SCARNESS: Tourist spot does steady business
In the Hervey Bay suburb of Scarness, house prices have remained steady, with only a slight drop in the 12 months to August 2019. As a result, the median value is comfortably below $300,000.
It’s a fairly similar story for the unit market, where the median price is just above $250,000. The relative stability of this market may be what has been attracting renters, as rental demand is quite high. This is evidenced by the striking increase of 9.4% in unit rental rates to an average of $290 per week.
Scarness is a tourist destination by the shore and is home to an ocean-themed playground.
Tourism: Given its location by the water, Scarness is popular with tourists
Rent: Unit rental rates rose by nearly 10% to a weekly average of $290
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