The following is a release from the REIQ from two weeks ago. The article notes that vacancy rates are dropping due to the subdued property market. Vacancy rates have dropped significantly in some key areas in the last 12 months: Brisbane City 2.6% to 1.9% and Redland City 4.3% to 2.4%.
Contact us for a copy of the release and the accompanying table.
RENTAL MARKET ABSORBS DISASTER DEMAND
Wednesday 20 April 2011
Queensland’s residential rental market has absorbed the impacts from this year’s natural disasters however demand is starting to tighten in some areas due to lower buyer activity, according to the Real Estate Institute of Queensland (REIQ).
The REIQ’s March residential rental survey has found vacancy rates have continued to tighten over the past six months as more and more buyers stay on the sidelines. “The floods did have a temporary impact on the rental market, but the REIQ rental survey has found this was mainly confined to flood-affected areas,” REIQ chairman Pamela Bennett said.
“However, the rental market is starting to be affected by the subdued property market given the low number of first home buyers and investors’ means there is more demand and less supply in the rental market.
“This also occurred in 2008 when high interest rates deterred buyers so it is not difficult to ascertain that the current economic conditions and the rapid nature of rate rises last year are having the same effect this year.”
The REIQ March rental survey, as well as statistics released by the Residential Tenancies Authority (RTA), have shown that the Brisbane rental market, while tighter, is not as dire as many anticipated. The rental survey found vacancy rates for the Brisbane City local government area tightened in March, coming in at 1.8 per cent, down from 2.6 per cent in September last year. RTA statistics for the start of this year largely illustrate drops in bonds lodged in suburbs directly affected by the floods, while January in general was a quieter month across the Brisbane area as many renters chose to stay put following the floods. While median weekly rents were up significantly in some flood-affected Brisbane suburbs during January, Brisbane as a whole recorded steady rents and a drop in the total number of bonds lodged for the month.
“With reduced rental accommodation in their immediate area, many tenants and homeowners displaced by the floods had to look to other suburbs for accommodation in January and February,” Ms Bennett said. “However, REIQ agents in unaffected suburbs reported that this did not result in any significant increase in rental demand in their local areas.”
RTA statistics show that demand for three and four-bedroom houses increased following the floods, while the two-bedroom unit rental market remained relatively stable. In general, REIQ agents are now reporting that the rental market has begun to return to normal conditions. In the surrounding areas of Brisbane, the month of January also recorded a lower number of bonds lodged. Vacancy rates for the Greater Brisbane area, excluding the Brisbane City region, have also tightened slightly since September, to now have a vacancy rate of 2.7 per cent. In Ipswich, REIQ agents report flood-affected properties are slowly returning to the rental pool while government assistance has also helped some displaced residents. Vacancy rates in Ipswich have held steady at 2.3 per cent in March compared to September. While the floods may have impacted on the lower number of bonds lodged during the month of January, it is typically a quieter time of year for the Caboolture region. The region recorded a vacancy rate of 4.3 per cent as at the end of March, down from 4.9 per cent in September last year.
For the Moreton Bay region overall, market conditions have also tightened slightly since the last survey, with rental listings receiving up to five applicants and taking up to four weeks to let in the Caboolture area, but just two weeks in the former Pine Rivers and Redcliffe areas.
In the Redlands, market conditions have tightened since the last rental survey in September last year. As at the end of March, the vacancy rate was 2.4 per cent, the lowest in the past 12 months. Agents are reporting a slight oversupply of stock however lease renewals are common with tenants preferring to stay put.