Rental crisis warning as vacancy rates tighten across state
A severe shortage of rental properties has created a "looming crisis" for Queensland tenants with less than one per cent of stock available across the majority of the state.
Data released by the Real Estate Institute of Queensland (REIQ) shows there is just 0.3 per cent of rental properties on the market on the Sunshine Coast and a mere 0.7 per cent on the Gold Coast.
Rental properties are just as scarce in regional areas with 0.4 per cent availability in Bundaberg and 0.7 per cent in Toowoomba, Mackay and Townsville.
Ray White Surfers Paradise CEO Andrew Bell said, with more than 600 properties on their books, they were the biggest rental agency on the Gold Coast and had a massive waiting list.
He said they're now fielding more than 12,000 inquiries a month and can let any upcoming vacancy out in days, sight unseen.
"This is a looming crisis," Mr Bell told The Courier-Mail.
"The industry has known for a long time that a three per cent vacancy rate is considered a balanced market.
"If it rises above that, it's a glut and rentals drop, and the reverse means there is a shortage of accommodation and in my 40-year plus career, I have never seen it below two per cent ever, including my time in Sydney.
"When a property comes up and a tenant gives notice … we can have it let out, sight unseen, within days, off our waiting list."
Rental stock is incredibly low in pockets of the Gold Coast, especially Oxenford (0.1 per cent vacancy), Runaway Bay (0.5), Currumbin (0.3, Miami (0.2%) and Palm Beach (0.3).
Mr Bell said the demand for rental properties in his agency had been fuelled by southerners wanting sea change and moving to the Gold Coast.
The flip side of the shortage was investors could be reassured of finding a tenant sooner rather than later.
"There is absolutely a time we need more investors and it is at a time when it should be more attractive to investors," he said.
"The interest rates are so low it's a very attractive proposition for investors."
However, the shortage in rental properties was not unique to Queensland, says Core Logic's Head of Research Eliza Owen.
Ms Owen said there could be "pain" for renters if there was a continued tightening of rental stock and it has already occurred in regional centres and outer metropolitan areas.
"We've already seen evidence of a tightening of the rental market in regional Australia and the periphery of metropolitan areas," Ms Owen said.
"We've seen an increase in rental values, and stock on the market has fallen."
While stocks are low across most of Queensland, CBD rental vacancies remain relatively high at nine per cent although they did peak at 14 per cent last April.
Ms Owen said the high vacancy rate across Brisbane's city centre was the norm in most capital cities following the COVID-19 outbreak and closure of international borders.
"A lot of stock has freed up around the centre of cities, rental values have declined and investor participation is waning because these are, traditionally, markets that have had higher overseas migration," she said.
"Closing the international borders was a shock to those markets."
Besides a five per cent reduction in rentals in the CBD, Greater Brisbane halved from 1.8 to 0.9 per cent between April and December last year and inner Brisbane stock decreased from 3.9 to 3.3 per cent.
REIQ CEO Antonia Mercorella said having fewer vacancies in the CBD was encouraging but there was still a long way to go to instil more confidence in the investment market.
"While it's extremely pleasing to see vacancy levels improve within the CBD, the market has yet to fully rebound," Ms Mercorella said.
"Despite the tapering of Federal Government support, such as JobKeeper, with business confidence reaching pre-COVID-19 levels, Brisbane CBD has seen around five per rental share reclaimed off the back of the pandemic."
Ms Mercorella said with so few rental properties available it was placing pressure on the housing market and it needs to be addressed.
"What we're seeing is an unprecedented level of diminishing rental availability," Ms Mercorella said.
"That's placing significant pressure on our State's housing sector - so much so that it's unsustainable and why urgent action is required to better support both increased and ongoing property investor activity in the Queensland property market and the contributions they make to the state economy."
The rental availability crisis on the Gold Coast and Sunshine Coast is repeated through regional areas where Bundaberg (0.4), Fraser Coast (0.6), Toowoomba (0.7), Mackay (0.7), and Toowoomba (0.7) have fewer than one per cent of rental properties on the market.
Available rental properties**
Greater Brisbane (20km+) 0.9 per cent
Gold Coast 0.7 per cent
Sunshine Coast 0.3 per cent
Toowoomba 0.7 per cent
Cassowary Coast 1.1 per cent
Bundaberg 0.4 per cent
Fraser Coast 0.6 per cent
Hervey Bay 0.9 per cent
Mackay 0.7 per cent
Townsville 0.7 per cent
Cairns 1.2 per cent
Originally published as Rental crisis warning as vacancy rates tighten across QLD