Brisbane city rental homes “disappearing”
There’s now fewer rental homes in our CBD than we had in 2006, according to new data on Brisbane’s housing market. The Residential Tenancies Authority stats for the December quarter show our CBD rental pool shrank yet again.
This is starting to become really obvious in the stats, but it’s something we’ve noticed on the ground in our agency’s sales team for some years now. Home buyers have been buying up rental properties and continuing the trend to move in from Brisbane’s outer ‘burbs. These buyers have booted out tenants and the new housing supply is struggling to replace these disappearing rental homes.
With investors only nibbling at the edges of the market they’re rarely prepared to pay the same prices as intending owner residents, so it’s not unusual to see buildings slowly transforming to a high percentage of owner occupants.
The RTA track all rental bonds and in Brisbane CBD and Spring Hill the total has reduced by 700 since its 2007 peak. For example for the full year 2012 the rental pool in postcode 4000 grew by a miserly 3 homes, despite the completion of Adelaide Street’s “Soleil Tower” with 464 apartments.
And there’s no large additions to the rental pool on the horizon. There’s just one big tower under construction in the CBD but it’s a long way from completion. So we’d expect it’s going to be well into 2014 before we see any worthwhile increase in supply.
Despite this we haven’t yet seen any big jumps in rent and 2012 finished with a modest 3% growth in Brisbane’s rents. Our team and other real estate agents are reporting a busy January market and we’re overall optimistic. But renewing tenants are generally not agreeing to big rent increases and rent affordability remains top of mind. Inner city tenants do often move further out to save money. Landlords are still cautious too and they don’t want to risk a vacant home. So it looks most likely that 2013’s rent rises will be steady.
As a sidenote we often see new apartments being sold off-plan with forecast rents that must have some large increases expected on today’s rents. ‘Ambitious’ might be the polite way to describe some of their estimates. Let’s hope those investors do their homework.