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REIQ reveals middle ring vacancy rate rising



The REIQ released its quarterly vacancy rate data today, revealing that Brisbane’s middle ring experienced a sharp rise in vacancies, while the inner ring remained relatively consistent with the June quarter.

Brisbane’s inner city (0-5km) vacancy rate for the September quarter has risen from 3.4%, to 3.7%. The middle ring (5-20km) has risen from 2.3% to 4.5%.

REIQ CEO Antonia Mercorella said the surprising result in Brisbane’s middle ring was likely due to a combination of factors.

“Inner-city property managers and landlords are particularly sensitive to the oversupply question at the moment and rents have become extremely competitive, luring tenants from the middle ring into the inner ring,” she said.

“Also, a significant level of development has come online in the middle ring and some agents have reported that without being able sell, many of those properties have been put into the rental pool.

“Another contributing factor is that interest rates are very low and with the State Government’s recent boost to the first-home buyer grant from $15,000 to $20,000, that is influencing people’s decision to own rather than rent,” she said.

Greater Brisbane’s vacancy rate remained in the healthy range of 3.3%.

Brisbane LGA reached 4.1% in the September quarter.

Ipswich has eased, lifting from 1.1% in June to 2.1% in September. This is still classed as a tight market.

Logan has tightened, moving from 2.8% to 2.0%.

Moreton Bay has eased slightly, going from 1.7% in the June quarter to 2.2% in the September quarter.

“Last week, the State Government released its South-East Queensland Plan and projected our population to continue to grow, reaching 1.6 million by 2041.

“Governments of all levels now favour greater density of population growth and our city skylines will feature more units and townhouses than ever before,” she said.

Regional Queensland yielded positive news, with consistent falls in vacancy rates for Bundaberg, Gladstone, Mackay and Rockhampton.

“It’s encouraging to see the September falls are the start of a consistent trend, with small vacancy rate falls reported over the past few quarters in all of these regional centres,” Ms Mercorella said.

“This is a sign that these markets are attracting workers who need rental accommodation,” she said.

“It is also a sign that rents have reached a level that the market feels is fair value, which is also good news for landlords and tenants.”

Only Townsville recorded a rise in vacancy rate data, lifting from 5.7% to a record high of 7.1%.

“This is surprising because Townsville’s property market, overall, is reasonably steady. Local agents tell us, anecdotally, that there have been a few break-lease situations where people are leaving to become owner occupiers, but how widespread this is, it’s hard to say.

“This is always a risk when interest rates are at historic lows,” Ms Mercorella said.

“However, it’s too early to draw any concrete conclusions about the Townsville market; next quarter may reveal the September result to be anomalous.”

Summary Points:

  • The tightest rental markets in Queensland are Caloundra and Noosa, both 1.2%
  • The weakest market surveyed is the Burdekin Shire with 9.6%
  • Three markets recorded the greatest lift from June to September of 2.2%:
    • Brisbane middle-ring
    • Cassowary Coast
    • Southern Downs
  • The greatest fall in vacancy rate was in Livingstone (Yeppoon), which fell from 12.3% to 8.3%, a fall of 4% points.

realestateVIEW.com.au is a partner of the REIQ summit