100 people per rental: Queensland vacancy rate hits new record low

Queensland’s rental vacancy rate has hit its lowest level ever, dropping below 1 per cent, with the hardest hit area in Brisbane falling to a shocking half a per cent.

Queensland's vacancy rate has dropped below 1pc for the first time ever.

Queensland’s rental vacancy rate has hit its lowest level ever, dropping below 1 per cent, with the hardest hit area in Brisbane falling to a shocking half a per cent.

Every region in Queensland except four were now showing vacancy rates below 1 per cent, with the hardest hit being Brisbane’s Moreton Bay South at a mere 0.52 per cent – the third worst SA4 result in the country behind Bunbury in WA and the Barossa in South Australia.

PropTrack economist Anne Flaherty warned there was worse to come for renters across the entire state, with the vacancy rate expected to be squeezed further cementing in rent increases for the next few years.

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This as the latest PropTrack Market Insight Report, out Saturday, saw Brisbane’s vacancy rate drop 0.05 percentage points during August to 0.84 per cent – a situation that was 59 per cent worse than conditions at the start of the pandemic.

“As a state, Queensland has one of the country’s tightest rental markets, with vacancy sitting below 1 per cent across the capital and regional areas. Queensland’s vacancy rate is at a new low,” Ms Flaherty said.

PropTrack economist Anne Flaherty said more rent price rises are ahead for a while for tenants across Queensland given supply shortfalls.

The numbers were dire across the whole of Queensland, with Cairns’ vacancy rate now a worrying 0.6pc, Toowoomba was 0.62pc Moreton Bay North 0.72pc, Brisbane North 0.74pc, Ipswich 0.75pc, Brisbane South 0.79pc, Darling Downs-Maranoa 0.8pc, Townsville 0.9pc, Brisbane East 0.93pc, Sunshine Coast 0.93pc, Brisbane Inner City 0.94, with Logan-Beaudesert and the Gold Coast both on 0.97pc.

Only four SA4 regions in Queensland were now sitting above 1 per cent – Brisbane West 1.15pc, Mackay-Isaac-Whitsunday 1.34pc, Central Queensland 1.39pc and Queensland Outback 2.26pc.

Population surges across Queensland during and after the pandemic have helped seal rental price rises for the coming year.

“Since 2022, Brisbane’s rental market has considerably tightened as the vacancy rate decreased by 0.33ppt year-on-year. In regional Queensland, the vacancy rate dropped 0.16ppt month-on-month to sit at 0.94 per cent, while a decrease of 0.2ppt was recorded over the past quarter.” Ms Flaherty said “unfortunately there is the potential that the vacancy rate could move lower”.

“We are seeing it’s more difficult for first home buyers to break into the market, we are seeing the population continue to grow, and unfortunately, this is coinciding with a period in which development costs have increased, and it’s more expensive to build new. I think conditions in the market are going to remain very challenging for tenants.”

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Cashflow Properties founder Bharat Patel owns 30 properties, most of which are rentals in Queensland.

Cashflow Properties founder Bharat Patel, who owns 30 homes, most of which are rentals in Queensland, warned the era of low rents may be over with as much as 100 people applying for some homes.

“Rents won’t go down, it’s like petrol and grocery prices, it won’t move much lower once it’s up,” he said. “It will be a disaster for the rental market. Sometimes I feel sorry for tenants but we can’t do anything, the builders can’t build fast enough and there is not enough stock.”

Mr Patel said swamped agents were now asking potential tenants to summarise their suitability in cover letters to cope.

A Brisbane rental queue in Kedron in May last year. The number of people applying for some individual rentals continues to astound agents. Picture: Debra Bela

“In Logan Central a property had more than 100 applications, with one tenant approved so 99 missed out. Imagine the amount of applications coming in for each property,” he said.

“Now real estate agents are asking for a cover letter, saying who you are, past rental history. It’s not in the legislation but some agencies are trying to reduce the amount of admin work this way.”

He said investors would continue to be drawn to Queensland’s tight vacancy rates and high rental yields. “For investors if the rental yield is getting more and more, that’s what you need. It improves your borrowing.”

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