“Until very recently, we had many potential first home buyers and investors sitting on the sidelines while our market and economy recovered from the natural disasters last year, which has put pressure on our rental market,” Real Estate Institute of Queensland (REIQ) CEO, Anton Kardash, said.
“However, this pent-up demand is now starting to dissipate with the latest Australian Bureau of Statistics (ABS) data showing increasing numbers of investors and first-timers coming back into the market.”
According to the REIQ, ABS lending finance figures for February showed the number of Queensland investors was up significantly compared to the same period last year. The data also showed that demand from first-home buyers and owner-occupiers was also starting to increase.
“This more robust level of investor demand is good news for our rental market given more investors means more investment stock for renters to choose from,” Mr Kardash said.
The latest REIQ March residential vacancy rates show the majority of the state is enjoying strong demand from tenants, with vacancy rates in many areas now below three per cent.
“A vacancy rate of three per cent is generally considered to be the equilibrium point of supply and demand,” the REIQ said.
In Brisbane, the vacancy rate has reduced to 1.7 per cent, from 2.3 per cent in December last year. Brisbane’s inner-city recorded a vacancy rate of 1.4 per cent, down from 1.9 per cent in December.
Agents from REIQ inner Brisbane accredited agencies report supply levels remaining limited as tenants stay put, students are settled for the year, and potential first home buyers still opt for a wait-and-see approach. Investment properties currently up for sale are largely being bought by owner-occupiers which is also contributing to less rental stock overall.
The Gold Coast rental market continues to improve with its vacancy rate falling from 5.2 per cent in June last year to 3.9 per cent in March. Likewise, the Sunshine Coast has improved from 4.9 per cent to 3.1 per cent over the same period.
According to the REIQ, Gold Coast agents are reporting increased demand for houses over units, which are still in oversupply. Well-priced rentals are also reportedly moving faster. Agents also report a recovery in investor activity – a sign that confidence levels are returning to the Gold Coast property market.
The REIQ said demand for property in Mackay remains strong, at 1.7 per cent, however there was an easing compared to December when its vacancy rate was just 0.7 per cent. Agents from REIQ accredited agencies say this easing level is due to a number of leases expiring as well as the upper end of the rental market moving more slowly. Tenant demand remains strong with some agencies reporting more than 10 applicants per listing and less than a week to let. Investor activity is also reportedly on the increase in the region.
Rockhampton recorded a vacancy rate of one per cent in March, making it the tightest rental market for major regions across the state, according to the REIQ. With tenancies reportedly taking less than a week to fill, local agents are welcoming the increased investor activity in the region.
The Cairns rental market has also improved markedly, the REIQ said, with it recording a vacancy rate of 2.5 per cent as at the end of March compared to 3.8 per cent at the same period last year. Agents from REIQ accredited agencies report a recovery in the tourism industry which is improving employment opportunities and therefore demand for rental property.
Source : Real Estate Business Bulletin (1 May 2012)