Brisbane landlords, Brisbane's rental market, Brisbane's sales market

“Dramatic” shortage: Brisbane’s rental and sales markets under pressure

There’s so much happening in both Brisbane’s rental and sales markets, we thought this update needed to give you the latest. The up-to-the-minute raw data plus a wrap-up from market commentators. Along with our current insight from our property management and sales teams on the ground.

Strap yourself in – this is a fast-changing marketplace!

Rental homes are in very scarce supply and “Brisbane’s vacancy rates have taken a dramatic dive this quarter, especially when looking at the 0-5km Inner Brisbane ring”. That’s the REIQ’s Antonia Mercorella, who reported 98.5% occupancy in our inner-suburbs. The Bees Nees team have just one vacant home on our books and it’s so far recorded 31 enquiries. CoreLogic’s Director of Research Tim Lawless says there’s 49% less rentals on the market than our city’s 5 year average.

Inner city apartment rents leapt 4% in the first quarter of this year (houses 5%), according to the Residential Tenancies Authority. They’re tracking bonds for new tenancies and it’s not uncommon to see a vacant property rent for $100 more per week when there’s a change of tenants. It’s tough for tenants and tensions are fraying as properties are swamped with enquiry and rented at these new market highs.

Brisbane added almost 22,000 to our resident numbers over last financial year, the fastest growth of all capital cities (Melbourne lost 60,500 residents). As most new arrivals tend to first rent a home, this calendar year and the opened borders have produced a huge extra wave of renting population. And led many to ask where our new housing supply will come from. Our sales team sell lots of rental properties but the vast majority go to owner-occupiers. It’s an industry-wide issue and these homes are being lost from the rental pool.

The REIQ is calling for more support to encourage landlords back into our market. The Queensland government’s first round of tenancy law changes come into effect on October 1st and they have second round reforms in drafting. The uncertainty of what they might include is causing concern for would-be investors when we desperately need more rental homes. REIQ’s Antonia Mercorella again: “The last thing we need right now in the midst of a rental crisis, is legislative reform which undermines investor confidence. We can’t afford to reduce the appeal of investing in Queensland. That’s why we’ll continue to advocate for fair and balanced legislation that maintains a level playing field for both investors and tenants.”

The federal election is in full swing with most parties far quieter on rental housing and investment policy than in 2019. Federal Labor has retreated from its policy opposing negative gearing and that’s been criticised by the Greens. According to their website, “The Greens are just a few hundred votes from the balance of power. In the balance of power, we will fight to protect renters’ rights and fund advocacy.” Their “Strenghten Renters’ Rights” policy is to “limit the amount and frequency of rent rises in private rental”.

Meanwhile Brisbane’s home prices continue to rise, up 1.7% in April and, according to CoreLogic, sales turnover is 50% above our city’s 10 year average. Tim Lawless says the time it takes to sell a local property is at record lows, so that’s created the shortage of listings. Buyers are frustrated with inventory levels 40% below our 5 year average. “The flow of new listings has generally been higher than normal in these markets; the shortage of available housing inventory in these markets is more due to a rapid rate of absorption as homes sell quickly amidst high demand.”

Tim credits some of our market strength to Brisbane’s continuing affordability where local households need 34% of their income to service a loan, while Sydney-siders need 49%.

With a run of long weekends, an election campaign and interest rate rises, the sales market could be expected to lose some momentum. What are we witnessing on the ground? Multiple offers are still the norm for properties coming onto the Brisbane market right now. One of our clients stretched themselves to an uncomfortably high offer of $538,000 for an inner-city apartment last weekend, only to lose out to another buyer at $580,000. We’re told that property received 10 offers in its first week on the market.

Scarcity of listings still seems to have buyers afraid of missing out. No one is sure how long this will last but, for now, those wanting to sell are making the most of the shortage.

Please share your comments. What do you think will happen next for Brisbane’s rental and sales markets??