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Brisbane remains one of the cheapest capital cities in Australia to rent a house or unit, coming in more affordable even than Hobart, a new report shows.
New figures from the Domain Group’s June quarter Rental Report show Brisbane is one of the cheapest capital cities to rent in the country, with the median weekly rent less than everywhere bar Adelaide and Perth.
The median asking rent for a house in Brisbane is $450 a week and $390 a week for units. Neither of these figures have changed in more than 12 months, the data showed.
The most expensive place to rent in Queensland is the Gold Coast, where the median rent is $500 a week for a house and $430 a week for a unit.
Propertyology managing director Simon Pressley said Brisbane’s rents had been largely stagnant for the past five years due to minimal growth in wages.
“This has happened in every capital city,” he said. “There’s a direct link between wage growth and rental growth and since wages haven’t been going up, rents haven’t either.”
“The upside of Brisbane’s stagnant rents is that it’s a relief for tenants. We’ve had a lot of household expenses increase, like electricity and petrol but fortunately putting a roof over our heads hasn’t.”
But the relief was unlikely to continue long term. Domain Group data scientist Nicola Powell said the increasing inflow of interstate migrants to Queensland would eventually bring Brisbane’s protracted period of stagnant rents to an end.
“That will be one of the game-changers for Brisbane moving forward,” Ms Powell said.
“We know that migration is one of the biggest drivers for demand in the rental market, so that turnaround in population growth will support rental demand and place upwards pressure on prices.”
Ms Powell said the increase in interstate migration was already taking effect outside Brisbane, with a number of regional Queensland towns recording healthy increases in median weekly rents.
The median weekly asking rent for houses in Mackay increased by a whopping 16.7 per cent year-on-year; unit rents have increased 19 per cent. In Gladstone, house rents are up 9.1 per cent and in Townsville, they’re up 3.2 per cent.
“Those regional areas are performing at a greater pace than the capital cities all over Australia. It’s about seeing that confidence,” Ms Powell said.
Mr Pressley said the strong figures from Queensland’s regions showed how their local economies were turning around.
“Mackay’s economy has gone from being basket case stuff to strengthening considerably, especially over the past 12 months. That places pressure on housing rents and, eventually, house prices over time,” he said.
“One of the main contributing factors is an increase in the mining sector. It’s arguably our most important industry, so when commodity prices go up, it creates more jobs.
“Mackay is sitting at a 1.8 per cent vacancy rate now but a couple of years ago it was more like four or five per cent.”
Mr Pressley said despite the stagnant rents, Brisbane’s strong yields meant the property market was still attractive to investors.
“The position for Brisbane landlords is that yields are decent,” he said. “A typical yield for a Brisbane investor is five per cent. That means your out of pocket expenses might be around $4000 annually
“In Sydney and Melbourne, the yields are low, more like three per cent, and your out of pocket costs are much higher. You’re looking at $30,000 for Sydney and $18,000 for Melbourne.
“So even though rents are increasing, from an investors point of view Brisbane is still affordable, gives decent returns compared to other capital cities and, this is the other thing, our growth cycle hasn’t commenced yet.”