Queensland rental market remains tight update July 2023

 

Regional Variations in Queensland's Rental Market

According to the Real Estate Institute of Queensland (REIQ) report, the rental supply squeeze continues to impact Queensland’s rental market, despite some slight increases in vacancies along the coasts. The latest Residential Vacancy Rate Report indicates a slight increase in Queensland’s statewide vacancy rate. It rose from 0.8 percent in December 2021 to 1.0 percent in June 2023. However, this figure remains significantly below the desired healthy rate of 2.6 to 3.5 percent.

Mackay

The vacancy rate in Mackay has remained static, staying at 0.8 percent. However, there has been an improvement over the past six months since September 2022, when the vacancy rate was recorded at 0.6 percent.

Brisbane LGA

The majority of improvements in vacancy rates across Greater Brisbane were modest, with a slight increase of 0.1-0.2 per cent. This trend was observed in Brisbane LGA (1.0%). Inner-city suburbs experienced a significant fall of 0.5 per cent in vacancies this quarter, dragging the overall vacancy rate even lower.

Outer Brisbane Areas

Ipswich (1.1%), Logan (1.0%), Moreton Bay (0.9%), Caboolture (1.1%), Pine Rivers (1.0%), Redcliffe (0.8%), Redland (1.3%), and Mainland (0.8%).

However, Redland’s Bay Islands deviated from this pattern, experiencing a significant increase in vacancy rates to a record 6.3 per cent, reflecting a diminishing demand for ‘island living’.

In contrast, Queensland’s tourism centres witnessed a considerable surge in vacancies, particularly in Maroochy Coast (1.9%), Sunshine Coast (1.6%), Caloundra Coast (1.3%), and Noosa, which entered the ‘healthy’ range with a rate of 3.1 per cent. However, this increase in vacancies may not necessarily benefit local renters, as it could indicate that the remaining properties are listed at prices beyond the reach of many families.

Other Areas

In Noosa, the median rent for a 3-bedroom house is $700 per week, unchanged from the previous year, suggesting a potential stabilisation in rental prices (*RTA median rents data June Qtr 2023).

The Gold Coast (1.2%), Hervey Bay (1.3%), and Fraser Coast (1.1%) also saw an increase in properties on the rental market during the June quarter. This could be due to a seasonal dip in demand for coastal living.

Despite remaining tight, Maryborough (0.5%) and Cairns (0.9%) showed slow but steady improvements in vacancy rates. In contrast, regional rental markets like Cook (0.1%) and Goondiwindi (0.1%) had virtually no vacancies, with Southern Downs (0.2%) and Tablelands (0.4%) also extremely tight.

Gladstone (1.7%) had the highest vacancy rate among regional centres, while Bundaberg experienced significant improvement, reaching a vacancy rate of 1.1 per cent, its highest since the onset of the pandemic.

Rockhampton (0.9%), Toowoomba (0.9%), and Townsville (0.9%) saw minor fluctuations, with all regional centres remaining in tight territory. Mount Isa is the exception in the restricted areas, which maintained a ‘healthy’ vacancy rate of 2.7 per cent. The median price for a 3-bedroom house in Mount Isa remained steady at $450 per week, indicating that a healthy supply can alleviate price pressure (*RTA median rents data).

While still considered tight, regional areas with the most rental availability in the June quarter include Cassowary Coast (1.5%), Gympie (1.1%), Isaac (1.1%), Scenic Rim (1.1%), Lockyer Valley (1.1%), Whitsunday (1.1%), Livingstone (1.0%), and the Central Highlands (1.0%).

Antonia Mercorella, the CEO of REIQ, expressed concern over Queensland’s persistently low vacancy rates and highlighted the social and economic implications. The tight rental market has made it challenging for essential workers, teachers, and students to find suitable accommodation, affecting communities’ economic prosperity and social fabric. Mercorella called for creative solutions and a long-term plan to address the housing needs of Queensland’s population.

REIQ CEO also noted that the tightening of inner-city Brisbane’s rental market could indicate a depletion of supply in the capital city. She found it intriguing that some coastal areas experienced a relaxation of vacancy rates and speculated that it might be due to properties transitioning from sales to rentals.

The tight rental market has created stress for tenants and property managers. The competition for rental properties is fierce, leading many individuals to explore alternative avenues such as social media. However, Mercorella cautioned against rental scams and urged people to remain vigilant to ensure the legitimacy of properties and owners.

Rental Market Classifications

Here are some key facts regarding the rental market in the June Quarter of 2023:

  • Queensland Vacancy Rate: 1.0%
  • Tightest Vacancy Rates: 0.1% in Cook and Goondiwindi, followed by 0.2% in Southern Downs
  • Highest Vacancy Rates: 6.3% in Redland’s Bay Islands (North Stradbroke, Russell, Macleay, Karragarra, Lamb, Coochiemudlo), followed by 3.1% in Noosa, and 2.7% in Mount Isa
  • Biggest falls: -0.4 in Isaac
  • Biggest rises: +0.8 in Noosa, +0.8 in Redland’s Bay Islands, +0.6 in Sunshine Coast

The Real Estate Institute of Queensland classifies rental markets into three categories: tight, healthy, or weak. These classifications are based on vacancy rates.

  • Tight markets fall within the range of 0 to 2.5 percent.
  • Healthy markets range from 2.6 to 3.5 percent.
  • Weak markets have vacancy rates of 6 percent or higher.

Conclusion

To conclude, the REIQ’s report for the June Quarter of 2023 highlights the ongoing tightness in Queensland’s rental market, with limited vacancies across most regions. While there have been slight improvements in some coastal areas, the overall rental market remains challenging for renters. Read our article for renting in Mackay for assistance or guidance throughout the rental process in Mackay.

                         

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