Gold Coast hits rent turning point, but Brisbane renters hit hard: SQM
The Gold Coast’s vacancy rate hit a “turning point” at 0.7 per cent, after having eased off for four months in a row, according to SQM data.
Rent on the Gold Coast has hit a turning point as vacancy rates ease for the fourth month in a row – with prices set to follow – but no such luck for Brisbane renters who face generational highs.
Latest data from SQM Research found that Brisbane rents grew a whopping 24.8 per cent for the 12-months to January with its vacancy rate continuing to tighten at a time that the Gold Coast market has begun to turn around for renters.
SQM Research managing director Louise Christopher said the Gold Coast’s vacancy rate had hit a “turning point” at 0.7 per cent, after having eased off for four months in a row.
“We’re still under 1 per cent vacancy rates on the Gold Coast, but it has been going up now since October. Normally over the summer months, you actually see falls in rental vacancy rates, this year we’ve seen a bit of a rise. It’s still very tight, still favouring landlords, but it’s showing signs of a little bit of an easing.”
Brisbane is not expected to see any rental relief until supply picks up.
Brisbane renters were not seeing any easing at all, he said, with the vacancy rate tightening to 0.8 per cent, with 2,845 vacancies in January. Rent prices were also at generational highs, he said.
“We’ve never had such an increase in this current generation,” Mr Christopher said of Brisbane’s 12-month price rise. “The last time we had increases like 24.8 per cent in Brisbane, or indeed across the country, was way back in the 1970s. This is rampant rental price inflation that still hasn’t been taken into account by the ABS (Australian Bureau of Statistics) in their rental index series of the CPI.”
In January Brisbane’s asking rent saw a monthly rise of 1.4 per cent to $594 a week for combined dwellings – now sitting higher Melbourne’s $549 a week.
“Whenever you’re seeing rolling monthly changes of greater than 1 per cent in asking rents, we’re talking about double digit annualised increases,” Mr Christopher said.
SQM managing director Louis Christopher.
He said Brisbane’s CBD was already feeling the impact of a rise in international student demand, with a vacancy rate of 1.4 per cent.
“The last time we had similar rental vacancy rates in the CBD for Brisbane was just before the building boom of 2014 … From 2013 through to just prior to Covid-19, the rental vacancy rate in Brisbane CBD was actually averaging around 6 per cent.”
He said the 12-month change in CBD rents were now outpacing Brisbane overall, which was rare – rising 25.3 per cent over the past 12 months.
“Normally the CBD underperforms because you see that surplus, but in the last 12 months at least it’s actually outperformed – from a landlord’s perspective – the wider Brisbane area.”
Mr Christopher said ‘would-be’ investors would be attracted to higher rental yields in later 2023 if the cash rate peaked below 4 per cent.
“However, if the cash rate rises above 4 per cent it is likely home buyers including investors will largely stay away from the housing market for another year, and so investment dwelling approvals will remain in the doldrums, setting us up for another super tight rental market in later 2024 and 2025.”
This post was originally published on https://www.realestate.com.au/news/gold-coast-hits-rent-turning-point-but-brisbane-renters-hit-hard-sqm/
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