Inner Brisbane vacancy rate hits 3.7 percent: REIQ

Inner Brisbane vacancy rate hits 3.7 percent: REIQ
Inner Brisbane vacancy rate hits 3.7 percent: REIQ

The REIQ June quarter data has revealed inner-city dwelling vacancy rate has hit 3.7 percent, but the middle ring has tightened a fraction, while most other markets, including regional centres, have improved. 

For the first time, the REIQ is able to provide a breakdown between houses and apartments in most markets.

The data has revealed that the apartment vacancy rate in the 0-5km ring of Brisbane is weak, at 3.7 per cent, but the middle ring, 5-20km ring, is healthy at 2.7 per cent. 

The vacancy rate for houses in the 0-5km ring is 3.4 percent and in the middle ring is tight at 1.8 percent. 

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Inner Brisbane vacancy rate hits 3.7 percent: REIQ

REIQ CEO Antonia Mercorella said this new data provided greater clarity around the house and apartment markets. 

“One of the most commonly asked questions around the inner city property market is regarding a perceived oversupply in the apartment market and now we have a more detailed survey in order to provide more information and more data to help us answer this question,” she said.

“Brisbane’s inner city vacancy rate for the June quarter for apartments in 3.7 per cent and while the REIQ classes this as just outside the healthy range of 2.5 per cent to 3.5 per cent, it’s important to remember that recent projects coming online have not yet been absorbed by the inner city population growth.

"With major projects, such as Queens Wharf and Howard Smith Wharves, creating thousands of jobs over the next few years in Brisbane's inner city we are confident demand for housing will continue to grow. 

“We are seeing steady levels of supply and equally steady levels of demand for inner-city apartments and we expect vacancy rates will hover around these levels for some time to come,” she said.  

Redcliffe has tightened from 2.4 per cent to 1.4 per cent, which is consistent with a long-term trend of hovering between 2.0 per cent and 1.5 per cent. 

Regional centres

The weak regional centres of Gladstone, Rockhampton, Mackay and Townsville all showed improvements. 

Gladstone has tightened from 11.3 per cent to 10.2 per cent and the REIQ sees this market as relatively consistent for the past three quarters.

“While the vacancy rate is high, the good news is that it has not worsened in three quarters so we’re optimistic that the bottom of the Gladstone market has been met and this market is now stabilising,” Ms Mercorella said. 

The Rockhampton vacancy rate continues to hover around six per cent, falling from 6.9 per cent in the March quarter to 6.5 per cent in the June quarter. 

“These tiny movements should not be overanalysed, Ms Mercorella said. “What this essentially means is the market is holding steady.”

“Mackay has fallen slightly from 8.1 per cent to 7.7 per cent and this represents a steadily tightening trend over the past seven quarters, which we’re cautiously optimistic will continue,” Ms Mercorella said. 

Mackay’s vacancy rate peaked at 9.8 per cent in December 2014 and since then had fallen steadily to reach 7.7 per cent in the June 2016 quarter. 

“Local agents tell us that this market is showing good signs of improvement and we’re hopeful this market is looking at a brighter prognosis for the rest of the year.”

The Townsville market vacancy rate fell from six per cent to 5.7 per cent and this is the second consecutive fall for this centre. 

“Our agents in Townsville feel strongly that the market is performing reasonably well and with two quarters of falling vacancy rates they are confident this is the start of a stabilisation trend. 

“We don’t expect it will return to 2013 levels of 3.5 per cent vacancy rate in the near future, but we think further tightening in the next quarter is a realistic expectation,” Ms Mercorella said. 

The only unexpected result was Bundaberg’s lift from 5.2 per cent to 6.3 per cent. 

“The selling market is holding steady in Bundaberg with the median house price at $276,000. 

“Local agents are reporting strong interest from pre-retirees in southern states who are buying now while conditions are good with the intention of renting for another few years until they are ready to retire into the property themselves,” Ms Mercorella said. 

“It’s this activity that has possibly boosted the level of stock in the rental pool and added a few vacancies to the data. 

“We expect this to normalise over the next few quarters and the rental market to contract again soon,” Ms Mercorella said. 

Areas in the southeast corner of the state that have consistently performed well over the past few quarters have continued to perform strongly. 

Tourism centres

“The Cairns rental market is tightening further and this will put pressure on weekly rents as stock levels become scarce,” Ms Mercorella said. 

“The Cairns vacancy rate has contracted for the fourth quarter in a row, dropping to 1.9 per cent from 2.1 per cent in the March quarter. 

“This is a tight rental market and the sales market for houses and apartments is also going ahead in leaps and bounds – a very exciting time to be in Cairns!” Ms Mercorella said. 

Whitsunday has dropped from 10 per cent to six per cent, which is a significant improvement. Local agents report some construction projects and improved tourism numbers are creating jobs and attracting new residents who are taking up rental accommodation. 

The Gold Coast and the Sunshine Coast continue to be tight rental markets, both slightly tightening since last quarter, from 1.5 per cent to 1.4 per cent. 

“With significant dwelling construction taking place on the Gold Coast we expect to see some easing of conditions in the medium term future, however for the foreseeable short term, rental conditions will remain tight,” Ms Mercorella said. 

“The Sunshine Coast market is also tight, and with little new construction slated we expect this to continue for some time to come.”

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Inner Brisbane vacancy rate hits 3.7 percent: REIQ

The tightest rental markets are Caloundra and Maroochy with just one per cent vacancy rate and the highest is Livingstone Shire (Yeppoon) with 12.3 per cent. 

 “Overall, there has been more good news than bad in this vacancy rate report and we’re optimistic that the state is moving towards healthier rates across the board,” Ms Mercorella said.

Tags: 
Brisbane Rental Vacancy

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