There’s been promising signs for property investors for some time, and we’d argue there’s now compelling evidence we’re rising from the bottom of the Brisbane rental market. Landlords are not breaking into huge smiles, nor are tenants despairing, but there’s far more balance after a number of years of strong supply. Here’s some of the stats and the on-the-ground observations of our property management team.
In the last 30 days we’ve recorded 1,667 new tenant enquiries into the Bees Nees office (yes more than 50 every day). It’s a big number, there’s lots of tenants searching, so no surprise our vacancy rate is just 1.9%. The REIQ has steadily tracked the inner-city’s vacancy lower since a 2017 peak, and chatting with tenants it’s clear they now have less to choose from.
Interestingly the December quarter still saw a further 2,300 rental dwellings added to Brisbane’s supply. Over the past two years more than 20,000 extra rentals have been added (a 13% leap) and almost half of those have been in our inner-city suburbs. We’ve had a ‘once in a generation’ tsunami of new supply, yet the market has returned to a relatively balanced position with remarkable speed. It’s testament to the strong trend to city living in Brisbane.
Tenants are staying put more often, according to our Property Managers who are negotiating their lease renewals. No longer tempted by a vacant and cheaper alternative, many are opting to stay in their current homes. And, importantly for landlords, we’re now recording some rent increases. Not all the time and usually just a few percent. Often these higher rents are simply a return to what was achieved in 2016 for example, and overly ambitious increases are still leaving us with vacant homes. The RTA’s December data shows median rents for new tenancies are stable (as they were for much of 2018). Balance is returning to the Brisbane rental market, but there’s definitely not yet any undersupply nor soaring rents.
Small renovations are earning rewards for property investors. We recently achieved a 10% uptick in rent for one Auchenflower apartment where the landlord painted, carpeted and replaced a shower. Well-presented property, as always, is first to attract the attention of tenants. In a market so heavily supplied with new dwellings it’s no surprise these expectations have risen.
Construction of new apartments has well and truly eased across inner-Brisbane, so a return to a balanced Brisbane rental market was inevitable. But the positive signs our team are witnessing every day suggest we’re rising from the bottom faster than many would have predicted.
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