Rockhampton vacancy rate could have ‘dire’ consequences
RESIDENTIAL vacancy rates in the Rockhampton region are at extreme lows, leading some property experts to warn a severe rental housing shortage could leave Queenslanders out on the streets.
Rockhampton has a 0.4 per cent vacancy rate, but some suburbs, such as Gracemere, have a rate of 0 per cent, according to SQM Research.
Real estate analyst Terry Ryder said in general, a reduction in house construction and fewer investors in the market created low rental supply and strong competition among tenants.
“I would describe the shortage of rentals in most parts of Australia as dire,” Mr Ryder said.
“We have available properties attracting queues of applicants – typically between 40 or 50 parties can be applying for the same property.
“In that situation, it’s not uncommon for tenants to make offers well above the asking rent or to offer payment of three or six months upfront in order to secure a home in the face of intense competition.
“A vacancy rate below 1 per cent represents a dire shortage and in many parts of Australia, this is the reality right now: the reality is that Australia is in the grips of a severe rental crisis and to ignore the social and economic impact of this would be a mistake.”
Louis Christopher of SQM Research said “regional Australia has put out the ‘No Vacancy’ sign”.
“Regional areas are approaching almost zero in terms of rental vacancies,” he said.
Mr Christopher said government intervention would alleviate the situation and better the economy.
“We need to have specific incentives introduced that will encourage investors to get into the market because they aren’t actively buying and haven’t been for some time,” he said.
“There’s a real opportunity here for government to implement investment policies that will inspire people to buy or build rental properties.
“That sort of progressive thinking is a win-win situation as it will boost the nation’s economic recovery post-COVID but will also alleviate the current pressure on the rental market.”
Real Estate Industry of Queensland CEO Antonia Mercorella said vacancy rates across most parts of the state were “very tight” and although rent might increase, it was important to recognise the “extraordinary situation” landlords went through this year.
“Obviously when the market is as tight as this it does make it very challenging for people trying to find a new tenancy,” she said.
“In terms of the perception of rents going up … it’s important to understand that we’ve only just come out of a rental eviction moratorium. Certainly we didn’t see rent increase during that period.
“It really wasn’t that long ago that in Central Queensland we were seeing very high vacancy rates and very static rent prices. We’ve got to be balanced.”
She said because COVID-19 rules took landlords by surprise, it was possible some were now trying to “create a buffer” by increasing rent; but, she added, at the end of the day, “the market decides what rent will be”.
“There’s no point asking for rent that the market’s not prepared to pay because the property will just sit there,” Ms Mercorella said.
“There’s no doubt that when there’s not a tenancy in place and you’re advertising a property then obviously you’ve got the ability to advertise at any asking price you wish.
“It’s a funny debate because not that long ago we saw landlords having to accept a lot less for their properties. I think we have to recognise that the market is the market, it is cyclical: sometimes it goes in the owner’s favour, sometimes it goes in the tenant’s favour.”
She said eviction moratoriums kept tenants in properties for a longer period than they might have stayed otherwise, meaning there had been less “turnover” overall, and that during that time demand had stayed strong, if not increased, because many people were moving to Queensland from other states.
“About 36 per cent of Queenslanders rent their homes,” Ms Mercorella said. “I suspect that number has probably increased.
“It’s not unusual to see 30, 40, 50 applicants applying for one property.
“People are making the decision to move into new properties and I suspect that was because we were spending a lot more time in our homes.”
Ms Mercorella said there was a misconception about who landlords were and stereotypes “don’t match the reality in most cases”.
“Despite a perception these properties are owned by wealthy investors … that’s not the reality,” she said.
“The reality is that it’s a mum and dad investor who owns one property, and usually there’s a fairly significant sacrifice that comes with doing that and some risk that comes with doing that.
“We do rely on those private investors doing some of the heavy lifting when it comes to providing housing. And of course we’ve got a growing social housing weight-lift.
“There’s a bit of tendency to want to depict landlords as greedy … and I think we’ve got to be careful about stereotypes.”
She recommended people looking for a home looked at surrounding suburbs with higher supply and considered living with others.
She said first-home buyers should take advantage of state and federal government grants.