”Affordability crisis”: Brisbane becoming city of forever renters

Brisbane is at risk of becoming a city of forever renters as its reputation for affordable housing comes crashing down.

People lining up to inspect a rental property in New Farm. Photo: Steve Pohlner.

BRISBANE is at risk of becoming a city of forever renters as its reputation for affordable housing comes crashing down amid a perfect storm of scared sellers, record low vacancy rates and hurtling home prices.

Industry insiders say a lack of supply, huge buyer demand and vendors taking a wait-and-see approach is turning the city into another Sydney, where people are forced to rent out of necessity, not choice.

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Place Estate Agents director of property management Cathie Crampton.

“It isn’t just interstate migration, now we’re seeing sellers who can’t or aren’t ready to go back into the market and tenants who don’t want to move,” Place Estate Agents director of property management Cathie Crampton said.

“There’s a real housing affordability crisis where people are now renting, not by choice, but by necessity, which we’ve not seen in Brisbane before. We’re seeing a market not dissimilar to Sydney in 2011/12.

This house at 27 Roseleaf Cres, Palmview, is for rent for $575/week.

“We’ve got this inflated sales market so affordability’s been compromised and some (sellers) are naively anticipating the market will come off the boil and they’ll be able to wait and get a bargain.”

New data reveals the suburbs that are the most in-demand among renters, yet face the biggest shortage of rental properties, are all outside Brisbane’s city centre.

This house at 84 Caladenia St, Deebing Heights, is available for rent for $390/week.

They include more affordable locations such as Deebing Heights in Ipswich, Coomera on the Gold Coast and Palmview on the Sunshine Coast.

In Brisbane, the rental vacancy rate is less than 1.5 per cent, while it’s even tighter on the Gold and Sunshine coasts.

This house at 3 Hovea St, Coomera, is for rent for $490/week.

REA Group director of economic research Cameron Kusher said the southeast Queensland suburbs most in-demand among renters were slanted towards the Gold Coast to Brisbane corridor.

“These locations are not necessarily the most desirable or expensive areas, but it shows that clearly a lot of people looking to rent are wanting that proximity to the Gold Coast and Brisbane.

“If you look at suburbs like Ormeau, Eagleby, Coomera, they’re clearly wanting a bit more space.”

Cameron Kusher, REA Group Director of Economic Research.

Mr Kusher said interstate migration and a shrinking pool of rental properties was the main driver of the rental shortage in Queensland.

“A lot of people have moved up to Queensland from NSW and Victoria and a lot haven’t bought yet because they’re figuring out where they want to live,” he said.

“Also, a lot of people who have owned rental properties have actually sold because prices have increased, so they’ve taken profits, but those properties haven’t been sold on to other investors, they’ve been sold to owner-occupiers so the actual pool has thinned out as well.”

Elisa McMahon of Hutton & Hutton Real Estate. Image supplied.

Hutton & Hutton lead sales agent Elisa McMahon said she had noticed an increase in owner-occupiers looking to buy a property as a second home, rather than an investment to rent out.

Ms McMahon said she had at least 10 people looking to buy a two-bedroom, loft-style apartment at 305/41 Robertson Street in Fortitude Valley as a second home.

“They had homes on the Sunshine Coast and Gold Coast and come to Brisbane every second weekend and wanted a place they wouldn’t rent out, just to stay in themselves or have friends use,” Ms McMahon said.

This apartment at 305/41 Robertson St, Fortitude Valley, has just gone under contract after attracting interest from people wanting to buy it as a second home.

Ms McMahon said low interest rates and the inability to travel overseas was also encouraging more people to spend money on a second property.

“When you look at the cost to stay in a hotel for a night, it’s a similar cost to owning a whole apartment,” she said. “And because values have gone up, you’re able to leverage the equity to buy that second property.”

Jessica and Ryan Anderson, at the inspection of a rental property in New Farm, fear they could become forever renters. Photo: Steve Pohlner.

Brisbane couple Jessica and Ryan Anderson recently attended the inspection of a rental property at 167 James St, New Farm, which is listed for $1200 a week with Living Here Cush Partners.

The four-bedroom house attracted at least a dozen people at the first open home.

This house at 167 James St, New Farm, is for rent for $1200/week.

Mrs Anderson said she had come to accept that she would be renting for some time given the rising cost of buying a home.

“The price of houses is way more than we were looking at a year and a half ago,” she said. “I still think it’s a smart investment (to buy), but just out of our price range.”