Brisbane Rental Market Update with Nicola Buck
Prevailing market conditions, such as historic low interest rates, affordable home prices, and steady capital growth opportunities, have contributed to fewer tenants and falling rental rates. On the flip-side, renters are in a stronger negotiating position and we have been seeing incumbent tenants asking for drops in rentals based on their own review of the market and media reports of lower rentals and oversupply in the unit market. We have seen a rise in tenants wishing to break their leases early as they become owner occupiers.
At the moment, where we are re-leasing properties, the same (or higher) rent is not necessarily being achieved on new leases. We are observing 0% – 6% drops for houses/townhouses across all inner Brisbane suburbs. There have been higher falls in the region of 3%-15% for units. This is explained by new unit supply coming on stream, much of which is located in inner city locations. Furthermore, older units with fewer amenities are unable to compete with better located and facilitated new unit stock, particularly if there is little pricing differential.
Indicative Gross Yields – Brisbane (Source REIQ: QMM March 2017 quarter)
| Houses | Units | ||
| March 17 | Dec 16 | March 17 | Dec 16 |
| 3.6% | 3.4% | 5.1% | 5.1% |
Residential Vacancy Rates
| Region | March 17 | Dec 16 | % change | Trend / Status |
| Brisbane Inner (0-5km) | 4.4% | 3.6% | 0.8% | Up / Weak |
| Brisbane Outer
(5-20km) |
3.1% | 3.3% | -0.2% | Steady / Healthy |
As always, our advice to landlords is to consider your risk profile when renewing a lease or re-letting a property.
Our standard process is to do an individual rental assessment on your property, provide you with advice then seek your instructions in order to start advertising your property 3-4 weeks prior to the incumbent tenant vacating. If your primary need is to have a consistent income, then in the current market our advice is to be flexible on asking rentals to minimise vacancy periods. If you have a little more appetite for vacancy, then you can test a higher asking rent and seek feedback from the market.
Call Nicola anytime to talk about the current rental market.
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