10 Aug 2020

Brisbane rents fall during pandemic: Domain Rent Report

Brisbane’s longest run of rental stability has ended, with house and units rents falling over the last three months, new data shows. 

The latest quarterly Domain Rent Report, released Thursday, revealed asking prices for houses across Greater Brisbane dropped by 2.4 per cent or $10, taking the median weekly rent to $400. Apartment prices also slipped, with the median rent down from $385 to $380. 

Within Brisbane City Council’s area, there were similar falls, with the median asking price for units falling by $5 a week and houses by $10 a week.

After years of relative stability and minimal price fluctuations, the global pandemic appears to have shaken the Queensland capital’s rental market — but agents say the market is already showing signs of bouncing back.

“To date, the Brisbane rental market has not been as affected compared to other capitals but international border closures, plummeting foreign student numbers, job losses and pay cuts have had an impact,” said Domain senior research analyst Nicola Powell. 

MEDIAN WEEKLY ASKING RENT – HOUSES

City

Rent

QoQ Change

YoY Change

Sydney

 $540

 0%

 0%

Melbourne

 $430

 -2.3%

 0%

Brisbane

 $400

 -2.4%

 0%

Adelaide

 $395

 0%

 2.6%

Perth

 $370

 -1.3%

 1.4%

Canberra

 $575

 -0.9%

 4.5%

Darwin

 $480

 0%

 0%

Hobart

 $450

 -4.3%

 0%

National

 $449

 -1.2%

 0.5%

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Source: Domain Rent Report, June quarter 2020.

MEDIAN WEEKLY ASKING RENT – UNITS

City

Rent

QoQ Change

YoY Change

 Sydney

 $500

 -3.8%

 -4.8%

 Melbourne

 $415

 -3.5%

 -1.2%

 Brisbane

 $380

 -1.3%

 0%

 Adelaide

 $320

 0%

 4.9%

 Perth

 $320

 0%

 3.2%

 Canberra

 $470

 -2.1%

 0%

 Darwin

 $380

 0%

 -0.7%

 Hobart

 $380

 -8.4%

 0%

 National

 $447

 -3.2%

 -2.9%

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Certain areas had bore the brunt of price reductions, including Brisbane CBD and the Gold Coast. “Brisbane’s CBD is particularly exposed to that reduced demand, with advertised rentals jumping from March to June and more landlords cutting asking rents,” Dr Powell said. 

The report found asking prices for apartments in the Brisbane local government area fell by 1.3 per cent over the quarter, although Eaden Hockings, of Living Here Cush Partners, said inner-city units had been hit much harder.

“There are certainly pockets and areas that suffered a much greater drop than that,” Mr Hockings said.

Areas like Spring Hill, with high levels of interstate and overseas travel, had been strongly hit, he said.

Median asking rent – Units

Region

June-20

March-20

June-19

Quarterly change

Annual change

Lockyer Valley

*

*

*

*

*

Somerset

*

*

*

*

*

Scenic Rim

*

*

*

*

*

Ipswich

$280

$280

$285

0.0%

-1.8%

Logan

$300

$300

$300

0.0%

0.0%

Moreton Bay

$325

$320

$320

1.6%

1.6%

Brisbane

$395

$400

$395

-1.3%

0.0%

Redland

$405

$410

$400

1.3%

-1.2%

Sunshine Coast

$410

$410

$400

0.0%

2.5%

Gold Coast

$425

$440

$430

-3.4%

-1.2%

Source: Domain Rental Report, June quarter 2020

And demand for inner-city furnished properties in the $300 to $600 range, that often typically cater to international students, had “completely fallen away”. 

In a bid to fill vacant properties, Mr Hockings said agents were having discussions with owners about slashing asking prices.

“There are a lot of tenants shopping around and assuming they can get good deals,” he noted, but warned that not all properties needed a price cut to secure a lease. “As always in real estate, the good quality stuff is resilient.” 

Dr Powell said Brisbane’s vacancy rate had nudged slightly higher compared with last year.

Median asking rent – Houses 

Region

June-20

March-20

June-19

Quarterly Change

Annual Change

Lockyer Valley

$320

$320

$320

0.0%

0.0%

Somerset

$320

$320

$320

0.0%

0.0%

Ipswich

$345

$345

$345

0.0%

0.0%

Logan

$365

$370

$370

-1.4%

-1.4%

Scenic Rim

$380

$375

$375

1.3%

1.3%

Moreton Bay

$395

$400

$395

-1.3%

0.0%

Redland

$445

$445

$450

-1.1%

-1.1%

Brisbane

$460

$470

$455

-2.1%

1.1%

Sunshine Coast

$500

$500

$500

0.0%

0.0%

Gold Coast

$520

$520

$510

0.0%

2.0%

Source: Domain Rental Report, June quarter 2020

The Gold Coast proved to be a two-speed market: house rents remained at a high of $520 a week —the most expensive place to rent—but unit rents took a 3.4 per cent hit.

Dr Powell said apartment rents had recorded their first annual fall since 2013, adding Gold Coast unit prices were “more likely to be exposed to a drop in international tourism”.

Andrew Henderson, managing director at Professionals Mermaid Beach, said houses and three-bedroom apartments had been steady throughout the pandemic while vacancy rates had spiked for two-bedroom apartments.

“That was mainly down to the fact that a lot of hospitality workers from overseas went home,” Mr Henderson said. Listings also surged when holiday lettings were shifted onto the permanent rental market.

“That had a bit of a big impact, hence pricing came down. But we have seen that starting to bounce back with jobs coming back in hospitality and retail.” 

Mr Henderson said furnished apartments were renting at a cheaper price than unfurnished equivalents, reflecting supply and demand.

Elsewhere, rents on the Sunshine Coast remain at record highs, with houses sitting steady at $500 a week and units holding high at $410 a week.

Rents for houses in Moreton Bay slipped by 1.3 per cent to $395 a week, while Logan recorded a similar fall, bringing the median weekly rent down to $365.

SOURCE; https://www.domain.com.au/news/brisbane-rent-report-967759/

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