Spike in rents is here to remain

THE spike in rental prices is expected to stay as the region plays catch up with the nation, a real estate broker says.

RE/MAX Success Toowoomba general manager Daniel Burrett said the slow increase in rental prices meant residents had felt the sharp pinch over the past 12 months.

“Rental prices in Toowoomba have been very stagnant for a long time,” he said.

“This is the sharpest rental increase we have seen in a given period, but we have had many years where we recommended landlords kept it the same.

“We’re in a catch up, pressure-cooker period, in line where they all should have been. It’s not going to change unfortunately.”

According to data, Toowoomba City house rentals have jumped 14.3 per cent over the past 12 months, while unit rental prices have gone up 14 per cent.

However, house rental prices in Mount Lofty have grown 15.8 per cent, while unit rental prices have risen 10.1 per cent – the largest percentage growth across the region.

The average rental price for a house is $440 in Mount Lofty and $400 in Toowoomba City, while a unit is $300 in Mount Lofty and $285 in the CBD.

“It’s all compounding the issue at the moment, it’s not real estate specific, it’s cost of living all around. That’s what rent is,” Mr Burrett said.

“At the end of the day, landlords can’t be benevolent because they’re also paying mortgages off … they’re also experiencing the cost of holding properties.

“It’s hurtful to families out there but across the years, it’s needed to balance out.”

A new study revealed 43 per cent of Toowoomba household income was reportedly allocated for rent.

“People used to be quite suburb specific, but they don’t have the luxury anymore,” Mr Burrett said.

“Supply has decreased dramatically, and people are selling investment properties, or removing rental properties (from the market) so their family or friends can move in.”

Mr Burrett said it was not realistic anymore to own investment properties.

“It’s a lot more difficult,” he said.

“The regulations and compliances that is put on to landlords are making it not as exciting at the moment.

“A lot of investors are tapping out … it’s just not worth it anymore, so they sell and that property leaves the rental pool.”

Middle Ridge is the most expensive suburb for house and unit rentals, with an average of $410 (units) and $500 (houses) a week. Highfields also shares the title of most expensive suburb for house rentals, at $500 a week.

The Toowoomba region’s vacancy rate sits at 0.4 per cent.