Five out of six Queensland regional rental markets weak, mining towns worst: REIQ

While Queensland’s rental markets are stabilising on the whole, five out of six of the regional markets in the state are still under stress and considered ‘weak’ markets, even with improving vacancy rates in four.

The Real Estate Institute of Queensland’s (REIQ) Residential Rental Survey, taken out across the REIQ-accredited agencies in June 2014, has painted a subdued picture for the six regional markets, and in particular notes high vacancy rates in Gladstone and Mackay.

REIQ acting CEO Antonia Mercorella said that rents had been softening in some of the regional centres, particularly mining areas where fly in, fly out (FIFO) has become the trend.

"Gladstone’s rental market remains in oversupply, however the level of tenant and investor activity has returned to normal."

“Median rents from the RTA (Residential Tenancies Authority) continue to soften in Gladstone, Rockhampton and Mackay,” she said.

“Gladstone’s rental market remains in oversupply, however according to local agents the level of tenant and investor activity has returned to ‘normal’ rental market conditions.”

Looking at 12 months ago, Gladstone’s median weekly rents in comparison have dropped significantly. For three bedroom houses, attainable rent is now $150 less, and two bedroom apartments are down by $140.

She noted that a similar situation is being seen in Mackay and Rockhampton.

Townsville is now recording the highest vacancy the region has ever recorded in the history of the survey and local agents have noted that below market rents are putting downward pressure on other rentals.

Toowoomba is the only regional area with a positive story, having kept a tight vacancy rate of 1.5%, up marginally from the end of March. It has not been above 2% since December 2011.

Here are the figures to know:

Bundaberg
Down
Weak
March 2014: 4.5%
June 2014: 4.0%

Gladstone
Down
Weak
March 2014: 6.4%
June 2014: 5.6%

Mackay
Down
Weak
March 2014: 7.5%
June 2014: 6.8%

Rockhampton
Down
Weak
March 2014: 5.6%
June 2014: 4.8%

Toowoomba
Steady
Tight
March 2014: 1.4%
June 2014: 1.5%

Townsville/Thuringowa
Up
Weak
March 2014: 4.7%
June 2014: 5.4%

Source: REIQ

For a market to be considered ‘weak’, a vacancy rate of over 3.5% is recorded. For healthy, 2.5% to 3.5% is expected, and for tight anything under 2.5% applies.