Brisbane rents hit record highs, as tenants max out budgets in many suburbs

House and unit rents have reached record heights in Brisbane, and experts warn the city now needs between 4000 and 8000 more rentals to bring the market back from the brink.

Median asking rents for units rose $10 in three months to reach the $600 per week milestone, making Brisbane the second-most expensive capital to rent a unit after Sydney, Domain’s latest Rent Report for the June quarter, released on Thursday, revealed.

Brisbane rents have hit record highs.Credit: Felicity Caldwell

Median weekly asking house rents also increased by $10 per week to an unprecedented $630, the report showed – almost 60 per cent more than a decade ago.

Brisbane’s vacancy rate is just 0.9 per cent: industry experts say a balanced rental market should sit between 2 and 3 per cent.

“We need between 4000 to 8000 additional rentals to push the vacancy rates in Brisbane back to that balanced market,” said Dr Nicola Powell, Domain chief of research and economics.

“There’s still pain there for tenants, and it’s still a landlord’s market. But we do have less momentum now, and the key change we’re seeing in this report is that a bit of pressure has been released from the cooker.

“House rents rose 1.6 per cent over the June quarter and that’s the slowest rent increase for a June quarter since 2020, and it’s the same for units.

“Units had the slowest quarterly rent rise since September 2022. But this also needs to be layered with the fact that it’s really competitive for tenants, and they are still staring at record rents.”

Powell attributes the significant slowdown in rent hikes to stretched tenants finally hitting their price ceiling and believes the trend will continue throughout 2024 – to the relief of renters. But with fewer than 2000 apartments delivered each year across the city between 2020 and 2023, and just under 3000 under construction this year, stock levels will likely remain a major pain point.

“The vacancy rate is still very tight, but it’s also now at a six-month-high, and this tells us the market is shifting and alleviating,” said Powell.

She believes changing tenant trends have further fuelled the shift, with renters forced to find housemates or move back in with parents. She added that while population growth in the Sunshine State remains strong, it has passed the peak.

“I think this trajectory will continue because I don’t think tenants can adjust their budgets any more to make way for more rent hikes. We can see massive chunks of Brisbane have already flatlined with rent prices,” she said.

The Domain report shows several regions flatlined over the June quarter, including houses in the inner city, Wynnum-Manly, Holland Park-Yeronga, Sunnybank, as well as units in the inner-city north, Sherwood-Indooroopilly, Nathan and Redcliffe.

Units in the regions of Capalaba and Strathpine bucked the trend and collected the largest rent hikes of 11 per cent and 10.5 per cent.

As for the priciest suburbs, Ascot and Hawthorne – with houses costing $1000 a week each – topped the list, with Chelmer close behind at $980 per week.

Katie Watson, from Ray White Sherwood and Graceville, said while units remained an incredibly hot commodity in her patch, demand had eased, with overpriced homes now sitting for far longer on the market.

“Our average ‘days-on-market’ is now 14, but if it’s a well-priced rental, it will be leased out after the first inspection. But we’re only getting between five and eight people at that first open so it’s not the numbers we used to have,” she said.

“Demand has absolutely reduced, and I do think rent prices will plateau. Prices just can’t keep going up because tenants can’t afford it.”

Watson said she was seeing more tenants embracing share-house living and even multigenerational families moving into big houses as they couldn’t afford to pay rent alone.

But while she believes price growth has eased, stock remains a major issue for the agency, with its vacancy rate sitting at about 0.2 per cent.

Ashleigh Boughey from Harcourts Pinnacle said the rental shift had finally allowed tenants to have a bit more of a say in the rental market. Applicants are becoming slightly pickier, and application numbers have dropped.

She agreed that the drop was fuelled by a swelling wave of tenants refusing to pay past a certain point, but she added that homes in the “low end of the price bracket” under $500 remained highly sought after.

“I certainly see a bit more of a stabilisation from here. We won’t see rent prices jump by $50 a week any more, but anything on the train line or near public transport, particularly for young couples, is popular.”