Brisbane rental market down in October: SQM Research
According to the latest report from SQM research, vacancy rates experienced tightening across all capital cities, with the exception of Darwin and Brisbane.
Both cities saw a 0.1% increase in vacancy rates. However, Darwin recorded the highest vacancy rate nationally at 1%.
Brisbane’s vacancy rate currently stands at 2.2%, up by 0.6% on last year’s figures.
The national vacancy rate for October was 2%.
SQM Research director Louis Christopher told Property Observer that Brisbane has seen a “real sustained rise [in vacancy rates] in the CBD itself”.
“The Brisbane market has been fairly well-supplied over the last few years. The Brisbane CBD rate is quite elevated at 4.2%. This is the seventh month in a row we have seen a rise in vacancy rates,” he said.
@JennieDuke But I don't like what I am seeing on the rental front in the CBD. Vacancies at 4.2% now and rising fast. https://t.co/pBkSdqtm3k
— Louis Christopher (@LouiChristopher) November 15, 2013
“Naturally this is one of the reasons why the overall vacancy rate [in Brisbane] has risen. It’s currently a tenant’s market in the middle of town.”
He notes that the vacancy rate in the Brisbane CBD was 2% in October last year.
When asked what could have contributed to this rise, Christopher rules out an increase in investor activity.
“Investor activity in the Brisbane market is relatively weak, definitely lower compared to the Sydney market,” he said.
“It’s a difficult one to call. We know supply is more fluid in the Brisbane market for some years now. There has been a state downturn in the economy, particularly in Brisbane. Office vacancy rates are extraordinarily high, at 12%. I’m just speculating, but this high CBD vacancy rate could be a reflection of a structural downshift in white collar workers,” he said.
He added that investors would find it difficult to lift rents in the Brisbane CBD.
Christopher also said it is important to note that rents in Brisbane have risen strongly over the last three years.
“Rents have risen 18.9% for houses and 25% for units. The last 12 months in particular have been weak, and both houses and units have been falling in rent over the last three months,” he revealed.
Conversely, asking prices have recorded increases of 0.9% for houses and 0.5% for units over the last 30 days, according to SQM Research.
@JennieDuke Our asking prices series is recording a similar trend (up 0.9%,houses & 0.5%,units) over past 30 days. https://t.co/X3Qy60Plql
— Louis Christopher (@LouiChristopher) November 15, 2013
The report also stated that nationally, Melbourne recorded the highest vacancy rate at 2.7%. Sydney recorded a vacancy rate of 1.5%, down by 0.1% from September this year.
Canberra recorded the highest yearly increase in vacancies, climbing 1.1% to 2.1% from last year’s figures.
Hobart was the capital city to record the largest yearly decrease in vacancies, falling by 0.5% to 1.5% on last year’s figures.
Adelaide recorded the largest monthly vacancy rate decline of the capital cities, falling by 0.2% during October 2013 to record a vacancy rate of 1.3%.