Login
iscover
How severe is Brisbane’s rental crisis? An expert unpacks five data points that paint a picture of the grim situation in the Sunshine State capital’s rental market.
CoreLogic’s head of research Eliza Owen stated that a record year of internal migration to the state in 2021 had exacerbated competition for housing in Brisbane and Greater Queensland.
Australian Bureau of Statistics (ABS) data showed that over the 12-month period to December 2021, the state’s population swelled by 50,000 interstate migrants. For perspective, the figures represent approximately 1,000 people per week becoming Queenslanders over the period.
Ms Owen explained that the surge in housing demand from the population growth added to the strain that the Sunshine State’s market was already under, caused by record-low interest rates, fewer people per household and delays in new housing completions.
The expert highlighted that the imbalance between supply and demand had a strong impact on the property market.
“Property values have climbed 38.1 per cent since the onset of COVID-19 in March 2020, and rents increased 23.0 per cent in the same period,” Ms Owen stated.
While the figures were beneficial to landlords and property investors, Ms Owen revealed that the rising housing costs had made low-income renters “particularly vulnerable to experiencing homelessness”.
She cited a recent report released by the Australian Housing and Urban Research Institute (AHURI), which showed that a tight housing market is one of many factors that increase the risk of Australians losing secure housing.
Ms Owen unpacked just how tight the city’s rental market has become in 2022:
1. The share of income used by households to service a new lease in the city has reached its highest level since 2009.
Data compiled by CoreLogic and the Australian National University (ANU) showed that the portion of median household income required to service a new rental lease across the capital city had hit 29.3 per cent in June 2022.
Ms Owen said that while this measure of housing affordability has “generally been improving” due to a construction boom across the city in the early 2010s, this dynamic has been changing since the September quarter of 2020.
She noted that this trend is due to the portion of income to service new rents hitting its highest level since 2009.
2. The median weekly rent value across Brisbane has surged 13.3 per cent over the year.
In another sign that Brisbane is plunging deeper into a rental crisis, CoreLogic’s data showed that the median weekly rent value for Brisbane at the end of August stood at $530 per week.
“Indexing this median by historic growth in rents, weekly values across Greater Brisbane have increased a record 13.3 per cent from around $468 in August last year,” Ms Owen commented.
3. Greater Brisbane’s rental vacancy rate is trending near record lows.
In August, the monthly rental vacancy rate (which measures the portion of vacant, available rental properties in a region) across Greater Brisbane was recorded at 1 per cent — less than half the five-year average of 2.8 per cent.
In July, CoreLogic estimated that the region’s rental vacancy rate hit a record low of 0.9 per cent.
4. Total rent listings are 48 per cent lower in 2022 than the previous five-year average.
In the 28 days to 4 September, the property data provider tallied 8,208 advertised rentals across the Brisbane market, which Ms Owen noted is 48.2 per cent lower than the previous five-year average for this time of year.
“The limited available rental stock has created stiff competition for rental accommodation, which has contributed to higher rental costs,” the expert commented.
5. Investors sold off properties as housing values peaked.
With Brisbane closing 2021 as capital growth king, Ms Owen said that investors took advantage of the phenomenal price growth in property values to cash in their investment profits.
CoreLogic’s data showed a significant surge in investment property sales throughout 2021, which Ms Owen believes may have contributed to a shortage in the city’s rental supply.
Ms Owen stated that if investors sold their properties to first home buyers, it could help to alleviate some of the demand pressure in the rental market as more people transition from being tenants to being home owners.
“However, if these investment properties are sold to households who are not first home buyers, for example, people purchasing a second home interstate, then there is less chance of a relief in rental demand,” she surmised.
You are not authorised to post comments.
Comments will undergo moderation before they get published.