Brisbane rental market shifts: agents witness a change
There’s a lot of decisions being made by governments and others right now, and most of them assume Queensland’s housing crisis is worsening. Rental homes are impossible to find. Politicians say changes must be made to give tenants more options and more rights.
Only the property management industry is witnessing something different. Perhaps, despite the predictable headlines, the rental market has already changed?
A real estate industry Facebook group lit up recently when one property manager asked others if they were also having less applications for each vacant home? A simple observation from one manager that it was taking him longer to rent each home and the comments came flooding in: “We are starting to wonder what rental crisis as enquires are low, no one shows up to opens.” “I’m seeing a lot of price reductions from overpriced rentals.” “It is definitely different to how it was a couple of years ago, but not the crisis that everyone is being led to believe.”
And perhaps tellingly, this comment: “I feel like the “rental crisis” is dead and the ones left affected are the ones who can not afford anything.”
We’re not suggesting it isn’t tough for tenants and we know, at the extreme end, homelessness is a problem that must be addressed. But perhaps we now have some tangible easing in the rental market. Perhaps affordability has bitten and the market has reached, or is close to reaching, some level of balance again.
We first noted this possible change in early February, when REIQ’s vacancy rate data saw some leveling out. There’s been chatter about it for a while now and the Bees Nees leasing team have definitely seen a softening in activity over recent weeks. While we’re just one small sample, (and our agency has a focus on the 5km radius of Brisbane CBD) we’ve charted our weekly activity levels over this financial year to find a trendline. And the graph below tells a fairly clear story of tenant enquiry per property easing in our office as the months pass.
The Bees Nees property managers receive varying responses to rental homes that show there’s clearly ‘markets within the market’. Homes above $800 per week have far less interest than those in the busy median prices of $300 to $700. The larger, more expensive homes take more marketing, more effort from our leasing team.
The experts say housing density will need to rise – if there can’t be more housing built to meet the growing population then we’ll need more people to live in each home. And we believe we are witnessing the first of this trend, with some – but only some – trend to more residents occupying each home.
Tenants and their landlords may need to change our thinking: for example more of those 2 bedroom apartments will now be home to a couple plus one single, or possibly even two couples. Bigger share households and extended family living seem likely to become more common.
The RBA are watching Australia’s household size stats with obvious interest. “The average number of people living in each household has declined from around 2.9 in the mid-1980s to around 2.5 since the early 2000s. More recently, (it) declined to historical lows of a little below 2.5 people per household.”
Some might call that low household size an unaffordable luxury and it seems inevitable it will need to rise. Tenants adjusting to the higher cost of housing by accepting bigger households. Landlords accepting more occupants and that potential for greater wear and tear. Compromise on both sides.
Perhaps government could lend their support to that trend, rather than continually legislating investment disincentives that drive landlords out of the market.
Please share your thoughts in the comments – we’d love your input on where the market might go.