Image Property,
Head Office at Image Property.
What the easing of restrictions mean for Brisbane’s rental market?
As more and more people head back to work, financial conditions are likely to improve for employees, including those in the rental market.
Likewise, with intrastate travel already permitted, and interstate travel perhaps not too far away, the influx of holiday properties on the Brisbane rental market will start to ease.
So, far, the main impact of these listings has been in the inner-city, where some investors had previously opted to rent out their units on the short-term letting market.
However, this temporary influx will likely be soaked up either by new long-term renters or by holidaymakers who will head to the Sunshine State for a holiday instead of overseas for the foreseeable future.
As I’ve written about previously, Brisbane has been in the fortunate position that there has only been a small percentage of tenants who were suffering from financial hardship from the coronavirus.
For those that were, most were able to secure a lower rent or perhaps even a rental deferral until they could get back on their financial feet.
There have been some media stories of late which have tried to paint a picture of Brisbane’s rental market resembling a basket-case with far too much supply versus demand from tenants.
The truth of the matter is that our rental market is currently classified as being in healthy shape with equal measures of both.
What I mean is that the latest data showed our residential vacancy rate was 2.8 per cent in April – only a slight increase from the 2.6 per cent recorded in April last year, when coronavirus was not something any of us had ever imagined.
However, unless you are property experts like us, those numbers might not mean much to you. But they are a measure of how a rental market is faring when it comes to tenant demand and rental property supply.
The accepted equilibrium point is generally considered to be three per cent.
So, as you can see, the Brisbane vacancy rate is actually a touch below that at present but is close enough to resemble a balanced marketplace.
One of the reasons why our rental market has probably held up better than other capital cities is affordability plain and simple.
Rents in Brisbane have long been much lower than Sydney and Melbourne, even though our incomes are not much different than that of our southern counterparts.
Again, that’s probably because those cities have much larger populations, with strong demand from tenants to live in a small number of locations. Did someone say Bondi?
Whereas, here in the Sunshine State capital, the demand from tenants is more even because our city is not so geographically spread out.
The same goes for our lower property prices, which has enabled more landlords to manage any temporary rent reductions because of the pandemic.
So, while southern cities struggle with rental markets ballooning with supply, it’s fairly obvious that ours remains in rude good health – with no signs of any drastic change to that diagnosis.
