Qld vacancy rates remain ‘critically low’

Vacancy rates remain critically low across Queensland with a new report revealing just one rental market in the entire state is deemed to be healthy.

The Real Estate Institute of Queensland (REIQ) Residential Vacancy Report for the March 2024 quarter said vacancy rates were as low as 0 per cent in Queensland, with rental availability remaining critically low across much of the state.

Of the 50 local government areas and sub-regions covered in the report, vacancy rates fell in 22, were stable in 10 and climbed in 18, compared to the previous quarter.

The report said the changes did not however represent any meaningful difference with movement confined to a modest 0.2 percent in most cases.

The overall state vacancy rate was 0.9 per cent, with similar figures in the Greater Brisbane area (0.9%), on the Gold Coast (1%) and on the Sunshine Coast (1.1%)

Markets were extremely tight throughout the rest of Queensland, including Bundaberg (0.9%) Mackay (0.6%), Rockhampton (0.7%),Toowoomba (0.8%) Cairns (0.7%) and Townsville (1%).

The worst areas for rental availabilities were Goondiwindi (0%), Charters Towers (0.1%), and Cook (0.1%).

At the opposite end of the spectrum was Mount Isa (3.4%), which was the only area to land within the 2.6-3.5 per cent range considered “healthy” by REIQ.

REIQ CEO Antonia Mercorella said Queensland’s rental market was not in a healthy state and faced a long road to recovery.

“Another quarter and it’s sadly the same old story of seriously scant rental availability

right across Queensland,” she said.

“This is not a pattern that any of us want to be seeing, report after report, but it is the reality for so many renters looking for rental housing in our state.

“Property managers are still overwhelmed by the volumes of applications and the inability to give every applicant a property, no matter how perfect a tenant they would make.

“When rental supply is at crisis levels, especially at the affordable end of the market, inevitably it means some rental applicants aren’t ever making it to the top of the pile, are left feeling exhausted, and could be running out of options.”

Ray White national operations manager for property management Elizabeth Foster said with more than 48,000 properties under Ray White management in Queensland they had noticed trends highlighting the impact of tightening vacancy rates and risingrents.

“With rental properties becoming increasingly scarce, tenants are tending to prolong their stays, as reflected in the sustained decrease in tenancy turnover rates over the past four years,” she said. “The tenancy turnover rate (the percentage of total properties that ended their tenancy) decreased from 4.4 per cent in early 2020 to 3.6 per cent at the end of the March quarter this year.

“Confirming the trend, the typical duration of tenancies has increased over the same time period from 400 days to 472 days in Queensland.”

Ms Mercorella called on the government to “step up” in the form of social housing and rental assistance to keep the most vulnerable people in the communities housed.

“At the same time, the longer-term solutions including a concerted effort towards improving productivity and affordability of the construction of new dwellings are essential to fixing this supply issue,” she said. “While we agree that build-to-rent initiatives could also be an important piece of the puzzle to boosting supply, we don’t see it being the ‘silver bullet’, and the rental market will still heavily rely on everyday citizen investors choosing torent out their properties.

“Our view is the incentives given to institutional investors should be extended to private investors, acknowledging the crucial role they play in housing Queenslanders and encouraging them to continue to do so.”