Sep
19

Brisbane Rental Vacancy Rates Among Highest in the Country

Bris Bldg 2 (1000 x 500)Large-scale building and more first-home buyers have kept Brisbane’s rental vacancy rates among the highest in the country for both houses and units, according to Domain Group data.

Buoyed by construction in the outer fringes, house vacancy rates are the second highest in the country at 2.6 per cent in July. Only Perth recorded higher vacancies at 4.1 per cent.

Inner-city development is likely the driver of high apartment vacancy rates, recorded at 3.1 per cent, which is the third highest of the capital cities after Perth and Darwin.

Estimates show an oversupply of 27,000 dwellings next year. 

Domain Group chief economist Andrew Wilson said July’s seasonal factors meant vacancy rates could be less stable than they appear.

“Typically vacancy rates tighten in July, which was seen with other capital cities – but Brisbane is the exception,” Dr Wilson said.

“This means although the rates appear stable, it’s really an indication they will continue to ease into the future,” he said.

“In terms of market dynamic, Brisbane still favours tenants, and vacancy rates are rising.”

 Brisbane suburbs with the highest vacancy rates for houses – July 2016
Houses
July Rent
Morningside $465
North Lakes $430
Springfield Lakes $400
Forest Lake $388
Yarrabilba $380
Griffin $380
Morayfield $350
Kallangur $350
Redbank Plains $340
Caboolture $313

 

Clusters of suburbs experiencing high building activity topped the lists for the most house and unit vacancies.

Redbank Plains, North Lakes and Griffin have the highest vacancy rates for houses. Brisbane City, New Farm and Hamilton rose above other suburbs to have the highest vacancy rates for units.

Brisbane suburbs with highest vacancy rates for units – July 2016
Units
July Rent
Brisbane City $530
New Farm $400
Hamilton $430
Fortitude Valley $400
South Brisbane $499
Nundah $390
Kelvin Grove $430
West End $458
Chermside $385
Kangaroo Point $450

Dr Wilson said more first-home buyer activity meant fewer tenants in the market.

“There are certainly more incentives for first-home buyers in Queensland, who are buying the new properties and leaving gaps in the rental market,” he said.

Real Estate Institute of Queensland recently released similar vacancy rate figures for Brisbane

Australian House Vacancy Rates – July 2016
Jul-16 Jun-16 Jul-15
Sydney 1.8% 1.9% 1.9%
Melbourne 1.6% 1.7% 1.9%
Brisbane 2.6% 2.6% 2.6%
Adelaide 1.8% 1.8% 1.7%
Perth 4.3% 4.3% 3.1%
Hobart 0.6% 0.6% 1.1%
Canberra 1.0% 1.0% 1.5%
Darwin 2.0% 2.1% 2.4%
National Capital City 2.3% 2.3% 2.2%

REIQ chief executive officer Antonia Mercorella said while a building boom factored into higher vacancies, housing demand would continue to remain strong.

“Brisbane’s inner-city vacancy rate for the June quarter for apartments is 3.7 per cent, and while the REIQ classes this as just outside the healthy range […], it’s important to remember that recent projects coming online have not yet been absorbed by the inner-city population growth,” Ms Mercorella said.

“With major projects, such as Queens Wharf and Howard Smith Wharves, creating thousands of jobs over the next few years in Brisbane’s inner city we are confident demand for housing will continue to grow,” she said.

“We are seeing steady levels of supply and equally steady levels of demand for inner-city apartments and we expect vacancy rates will hover around these levels for some time to come.”

(Source: Domain Jason Quelch