When we review the Residential Tenancies Authority’s stats each quarter we usually see what we expect: if it’s been quiet at Bees Nees with properties taking longer to rent, then official records usually show flat rents. But over the past few months, the reported data hasn’t been reflecting our on the ground experience. Our vacancy rate has been tiny (other agencies might have been a bit higher – they don’t have the talented team we do!) but the reported median rents haven’t risen.
Researchers BIS Shrapnel say Brisbane should expect annual rent rises of 5 to 7% over the next couple of years as housing supply struggles to keep up. ABS data shows housing approvals at a 15 month low. Any quick glance across Brisbane’s inner-city tells a story: there’s only a couple of cranes working on residential towers, new low-rise and townhouse projects are almost non-existent, and it’s been that way for most of the past 4 years.
There are some reasons to explain the flat rents to date, in spite of the lack of new housing. Population growth has slowed, international student numbers (a huge market for the CBD and immediate surround especially) have cooled a little, some tenants bought their own homes with the First Home Boost, and yes, we are putting more people into the same number of homes with 20-somethings staying at home, group households and sharing increasing etc.
But as incomes grow do you really think parents are going to let those kids freeload much longer? Mums and dads have waited a long time for that quiet home! And share households have a tolerance breaking point when that dishwashing-incapable toilet-seat-leaver-upper, smelly and inconsiderate flatmate just isn’t worth the rarely-paid-on-time rent!
It’s starting to look like there’s no more room at the Inn for Brisbane’s inner city tenant market, and BIS Shrapnel’s forecast would be a welcome reward for patient property investors in 2011.