The new year is off to a flying start with enquiry to our office from new tenants at extraordinary levels over this first 3 weeks. And the final rental stats for 2007 give us a clue why – the number of rental homes within Brisbane’s inner city has experienced a significant drop, creating new pressure for tenants and forcing rents to further record highs.
The Residential Tenancies Authority record the 21 suburbs around the CBD as “inner city” and in the December quarter the total number of rental homes in this area dropped by a very large 428. The CBD and Spring Hill were worst hit with a 7% drop in their total supply of rental homes. Owner-occupiers are buying and moving into the inner city suburbs in big numbers, often into previously rented homes. In addition there’s a continued trend for apartment buildings being converted to short-stay hotel operations – and this is forcing tenants out of the inner city. Across the whole of Brisbane the number of rental homes grew just 2,698 during 2007. The total bonds held by the RTA shows a market that’s just not keeping up with demand.
Take a good look around within a two to three kilometre radius of the CBD and this is where Brisbanites and new arrivals want to live, but there’s very few cranes in the skyline. We’re not replacing those lost rental homes. Not surprisingly median rents have jumped again, with an inner city two bedroom apartment now costing 22% more than it did just two years ago and a three bedroom home also up 25%.
You now have median rent for a two-bedroom apartment in the CBD at a whopping $495 per week, which was up another 13 percent during 2007. With little prospect of new apartments and homes coming online we’d expect 2008 will comfortably show double-digit growth in rents yet again.