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For the Brisbane rental market, there’s good news all round. If you’re a renter, congratulations; rents for both houses and units are flat, again.
“Tenants in Brisbane have enjoyed four years of steady rent,” Domain Group senior data analyst Nicola Powell said. “It’s more or less the longest period of stability for tenants in the country.”
While zero yearly change for rents might not seem like a great win for investors, rental yields for houses didn’t decrease year-on-year and unit yields surged 3.9 per cent.
For Greater Brisbane, house rents were $400 again and $375 for units, up on last year’s median of $360.
Yields stayed stronger than Sydney and Melbourne at 4.62 per cent for houses and 5.12 per cent for units, leaving the Queensland capital a good prospect for investors.
House and unit prices have remained fairly flat in Brisbane in the June quarter, but units were down 1.2 per cent.
RENTS QOQ YOY
Houses 0.00% 0.00%
Units 1.40% 1.40%
Yields QoQ YoY
Houses 0.60% -0.60%
Units 0.70% 3.90%
But it’s now no stronger than most other capitals, with Darwin and Canberra emerging as good value-for-money markets with yields almost 5 per cent for houses and about 6 per cent for units.
Brisbane rents have stayed stagnant for more than a year now, due to tough market conditions for investors.
NAB Group chief economist Alan Oster said lending restrictions and the loss of foreign investors led to falling or stagnant prices across much of the country, and Brisbane’s market was still dealing with an overhang of unit supply.
“We’re worried it’s one of the most over-built markets,” he said.
But in the NAB residential property survey for the September quarter released on Wednesday, Queensland emerged as the only state with positive industry sentiment based on capital growth and rents.
Mr Oster said Brisbane was holding up relatively well, compared to other markets, but still was years away from any significant growth.
“We have Brisbane as flat for two years,” he said of both prices and rents.
But much of the extra stock was beginning to be absorbed and the market was showing early signs of growth, Dr Powell said.
“Unit rents have increased for the first time in two years,” she said. “If you look at the overall picture, we’re seeing the stock flip, particularly for units.”
The property industry was returning to normal, Dr Powell said.
“We’re seeing dwelling completions slow, and a decade high of internal migration,” she said. “Brisbane is now one of the fastest growing cities, up there with Sydney and Melbourne.
“I think it will end up tightening rental conditions in Brisbane.”
Real Estate Industry of Queensland chief executive Antonia Mercorella said based on her figures, the rental market was easing out of oversupply territory.
“Over the past six months, the Brisbane LGA rental market has strengthened – moving from the healthy range in December 2017 to the tight range in June this year – which is good news for investors,” she said. “Vacancies in Brisbane LGA tightened from 3.1 per cent in March 2018 to 2.3 per cent in June 2018.”
Ms Mercorella agreed if rents were to increase in Brisbane, it would happen gradually.