Rental markets across Queensland are showing signs of improvement, according to the Real Estate Institute of Queensland’s (REIQ) Q1 2018 Vacancy Rate report, released last Friday.
Regional Queensland, in particular, has delivered good results, following three years of lacklustre results.
Antonia Mercorella, CEO of REIQ, said regional vacancy improvements in the March quarter followed similar minor improvements in the December quarter.
“Some of our markets, such as the Gold and Sunshine Coasts, remain uncomfortably tight, and we would like to see more investors enter those markets; however, APRA’s tightened lending criteria is not encouraging investors to consider property,” she said. “The result is tight markets remain tight, despite good opportunities for landlords in those markets.”
Greater Brisbane’s vacancy rate eased by 0.1% to 2.7%, and remains a healthy market. Looking more closely at this region, the Brisbane LGA also eased by 0.1% to 3.1%, which indicates a healthy market for a second consecutive quarter.
The inner ring (0-5km radius) tightened, returning from the weak range to a healthy 3.5%. This is good news for this market, as it reflects good rental options for tenants and greater opportunities for landlords looking to secure good tenants.
The middle ring (5-20km radius) eased slightly, moving from the tight to the healthy range and registering a vacancy rate of 2.8%.
“It’s gratifying to see that all areas of the Brisbane rental market are operating in the healthy range and this [is starting] to impact speculation about oversupply,” Mercorella said. “The data shows a very resilient market capable of absorbing the perceived oversupply.”
Ipswich tightened marginally, dropping from 3.1% to 3.0%. However, the suburb has maintained its position as a healthy rental market.
“This area is really a growth corridor for Queensland and we’re seeing buyers and renters flocking to this part of the southeast corner. It’s great news that the rental market is maintaining its stability and healthy status,” Mercorella said.
The Gold Coast held steady at 1.1%. This market was measured in the months before the Commonwealth Games, and it will be interesting to observe market performance over the next two to three quarters as visitors leave the region.
“Early next year, the Athletes Village will be redeveloped into a Health and Knowledge Precinct including mixed-use residential precincts with more than 1100 apartments,” REIQ said.
“Our hope is that these units will find investor buyers and this could contribute to easing the tight rental conditions in this beautiful part of the world,” Mercorella said.
The Sunshine Coast, overall, has a vacancy rate of 1%. “The Sunshine Coast is very challenging for renters who are looking for accommodation and we have said consistently for quite some time that this market would benefit from additional investor activity,” Mercorella said. “The upward pressure on rents, as a result of this tight vacancy rate, will serve to push this market towards unaffordable.”
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