26 Aug 2019

Brisbane rent prices steady but city’s relative affordability is improving

It’s business as usual for Brisbane renters, with median house rental prices remaining steady year-on-year at $400 per week, making it the third cheapest capital city in Australia to rent a house.

Prices for the Greater Brisbane region have actually fallen by 2.2 per cent over the quarter. Moreover, vacancy rates have fallen to 2.2 per cent from 2.6 per cent over the past 12 months, which suggests the market may be strengthening.

The median unit rental price remained flat at $380 per week, which is still growth of 2.7 per cent year-on-year – putting prices at the same point as in-demand Hobart.

Domain economist Trent Wiltshire said the Brisbane rental market had been flat for some time.

“Rents for houses are at where they were at the end of 2013,” he said. “For units, it’s a similar story. Units have been unchanged since 2013.

“If you think about inflation, in real terms rents have fallen.”

He noted that while there had been much concern about unit oversupply, rents had held up better than expected.

“There was big concern about there being lots of new apartments in Brisbane,” Mr Wiltshire said. “And yes, prices have fallen about 10 per cent – but while rents have fallen a bit, not that significantly.”

The strongest increase in unit rents was in the inner-city region, Mr Wiltshire said. Annually, the data showed prices grew 6.3 per cent and by 1.2 per cent over the quarter, to $425.

Ray White Brisbane CBD agent Mitchell Martin said fully-furnished apartments were being snapped up much quicker than those that were unfurnished.

“Our demographic are usually wanting something fully-furnished to move in straight away,” he said, explaining many of their tenants were interstate workers, international students and some business executives.

Mr Martin said rental demand tended to follow a seasonal pattern, with January to March quite strong and May and June fairly quiet. Entering July, however, he said demand usually picked up quite substantially.

“What we are finding is executive style houses are struggling a lot,” he added, suggesting that with the Reserve Bank cutting interest rates again, it might be more enticing for tenants at the price point to take the plunge and buy.

“If you are looking at wanting to invest in something I would say a two-bedroom, or something in a smaller apartment complex,” Mr Martin said. “Your return will probably be more than a million-dollar home in New Farm.”

Further south, Kate Bailey of LJ Hooker Sunnybank Hills said rental activity was strong.

“We’ve had a real increase in tenant movement – lots of tenants giving notice and lots of tenants moving around,” she said.

She said houses and townhouses were in demand, with most of it coming from families, some of whom were targeting specific school catchments.

“In comparison to where we were 12 months ago, I feel the market is actually stronger,” she said.

Tenants Queensland chief executive Penny Carr said unchanged rents were not of much benefit to Brisbane tenants in housing stress, which is about 28 per cent of renters in the council area, according to the last census.

“Additionally, wages are not increasing, so those low to moderate income renters are also not gaining much,” she explained, adding that the change in vacancy rates might also have an impact.

“New units coming on the inner-city market tend to be at a higher cost because they’re new. That can help to push rents down slightly for older properties, mostly units, but if vacancy rates are heading lower, that will mitigate any benefit to renters.”

Further afield, only the Sunshine Coast saw an increase in median house rents quarter-on-quarter, lifting one per cent from $495 per week to $500 per week. Year-on-year, the region recorded 2 per cent growth.

The Gold Coast recorded some strong rises in rent prices, particularly in the hinterland, which saw an 8.7 per cent jump.

Mr Wiltshire said long-term trends like very strong population growth and and a slower rate of building activity than that in Brisbane could account for the rises on the Gold Coast.

While prices for houses and units were relatively unchanged over the past year, median house rents had risen 11 per cent and units by 23 per cent over the past five years.

Brent Martens from Harcourts Coastal said demand typically quietened during winter, and with a bit more stock available he was seeing tenants being a little more selective.

“Everyone wants to be near the beach, cafes, that sort of things,” he said. “Anywhere from Broadbeach to Burleigh Heads, near the beach, that goes very quickly.”

Mr Martens said there were a lot of people looking for centrally-located furnished apartments, with modern buildings tending to do better.

“If they are priced right, they are still leasing OK,” he said. “The newer ones are going really well.”

SOURCE ; https://www.domain.com.au/news/brisbane-rent-prices-steady-but-citys-relative-affordability-is-improving-856922/

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