Median rent values in Brisbane have increased 13.3% in the past 12 months as rental vacancies drop to a record low of 1%.
This is less than the five-year rental vacancy average of 2.8% as demand for housing nationally has surged amid record-low interest rates, fewer people per household and delays in new housing completions.
CoreLogic has released its Property Pulse report on the Brisbane rental crisis which shows a record year of internal migration to Queensland in 2021 which has exacerbated competition for housing.
Eliza Owen (pictured above left), head of research at CoreLogic, said property values had climbed 38.1% since the onset of COVID-19 in March 2020 and rents increased 23% in the same period.
“Amid the rising housing costs, low-income renters are particularly vulnerable to experiencing homelessness,” Owen said. “The portion of income to service a new lease in Brisbane has reached its highest level since 2009 and the portion of median household income required to service a new rental lease across Brisbane reached 29.3% in June 2022.”
Read more: Capital city auction clearance rates rising
Owen said total rent listings were 48% lower in 2022 than the previous five-year average.
“CoreLogic counted 8,208 advertised rentals across the Brisbane market in the 28 days to September 4. This is -48.2% lower than the previous five-year average for this time of year,” she said. “The limited available rental stock has created stiff competition for rental accommodation which has contributed to higher rental costs.”
Owen said investors have “sold up” as housing values peaked.
“There was a surge in investment property sales through 2021 which may have contributed to a shortage in rental supply,” she said. “It is worth noting that if investors sell to first home buyers, this can actually alleviate some of the demand pressure in the rental market as people transition from renting to home ownership.”
Brisbane auction preview for September 17 and 18
Brisbane is expected to see auction volumes rise 33.1% week-on-week for the weekend of September 17 and 18, with 169 homes scheduled to go under the hammer. This is up from 127 last week, making it the busiest auction market amongst the smaller capital cities.
For the weekend ending September 11, the Brisbane auction clearance rate was 38.6%. Of the 127 homes at auction, only 49 sold, making it the lowest clearance rate in Brisbane since the week ending November 8, 2020, when it was 36.5%.
North Brisbane Home Loans mortgage broker Luke Ashby (pictured above right) said Brisbane’s “rental crisis” was due to a number of factors.
“Interstate migration is rising due to cost-of-living pressures and property prices in Sydney and Melbourne selling for higher prices – then those people buy for cheaper in Brisbane and have cash left over,” Ashby said. “There are also people who worked overseas prior to COVID-19 who are now coming home and deciding to live in Queensland. The introduction of working from home makes it easier for them to live and work anywhere they choose. We have good infrastructure and are always improving with [the] Cross River Rail, the new casino, plus the Olympics are coming.”
Read more: Big weekend for auctions
Ashby said he had noticed fewer investors in the market now compared to the beginning of the year.
“We are putting this down to rising interest rates and investors holding off to see where things end up, potentially waiting for a stabilisation in interest rates before buying again,” he said.
“I think the rental crisis is real across Brisbane as interstate migration has been a real issue here with families from Sydney and Melbourne able to afford six to 12 months’ rent upfront, making them more attractive as tenants.
“There are also people who are happy to pay above market rent per week, which has been pushing out locals and causing less vacancies.”
