The latest data revealed Brisbane recorded the strongest rise in dwelling rental prices which climbed 38.1% since March 2020.
Rising rental prices are significant to both landlords and tenants and Place Director of Property Management, Cathie Crampton, who has worked through many market cycles spoke about the rental vacancy rates and what they mean for your property journey.
Why are rental vacancy rates low?
"The reason we are experiencing low vacancy rates in Brisbane comes primarily down to supply and demand. There is currently less supply on the market, which means that there are less new properties coming to the rental market. This is due to fewer properties being built, more people choosing to be owner-occupiers rather than investors and individuals opting to sell their investment property to leverage off Brisbane's fantastic sales market," Cathie said.
"As a result, there has been less choice when it comes to tenants choosing properties, which naturally means an increase in demand."
"In Brisbane, we have witnessed a heightened sales market, especially in the last two years where we’ve seen an increase of over 25-42% in the value of properties."
Data from CoreLogic shows the surge in investment property sales.
Monthly new investor listings, Greater Brisbane. Source: CoreLogic
"The increase in individuals selling their investment properties results in a reduction in the availability of rental stock, which as a result, exasperates demand."
CoreLogic indicated that Brisbane recorded the strongest quarterly rise in dwelling rents (3.8%) of any capital city, despite the pace of growth easing from the recent peak rate of growth (4.2%) recorded over the three months to August.
What does this mean for landlords?
"Rental increases result in improved yield and improved yield means increasing asset value prices, it's a great time to be a property investor," Cathie said.
"If you are in the position to purchase a rental property now, you are just about guaranteed rental increases."
"At Place, we continue to support vacancy rates that typically match or are less than the market rate. Our current vacancy rates are sitting between 0.3-0.6%, which compares well to the national rental index which is sitting at 0.6%. We are also able to demonstrate solid rental increases, which supports our landlords in improving the value of their assets."
"We also communicate updates on legislation, as well as provide best practice advice to our clients. This enables them to maximise their returns and ensures that they are working within current regulations."
What does this mean for tenants?
"Despite what is commonly heard in the media, the rental vacancy rates are an advantage to tenants because landlords like tenants to have leases! If tenants have leases, it means they have a guaranteed tenure. So this market serves both parties,” Cathie said.
"In a climate like this, it is understandable for tenants to feel somewhat anxious about securing a rental property. My advice to tenants in any market is to present their application in full readiness. This means:
- Provide evidence of capacity to pay for your rent, such as payslips and bank statements.
- Provide employment, rental and personal references.
- Include all of your points of ID (Driver’s License, Passport, Medicare number etc.) in your application.
- When you’re at an open home, present as the most suitable applicant for the home. Dressing well and greeting the listing agent can go a long way!"
To keep up-to-date with Brisbane's rental and sales market, subscribe to our newsletter below.