According to the Real Estate Institute of Queensland (REIQ), the latest vacancy figures show there may be a two-speed rental market in the state, with the south east corner performing better than most other areas.
The state’s tightest vacancy rates can be found on the Sunshine Coast, where Caloundra and Noosa currently boast a vacancy rate of just 0.9%, while the Sunshine Coast’s overall vacancy rate has tightened from 1.6% to 1.3% over September.
“We’re seeing strong demand for rental properties in these areas and while a small level of this demand is seasonal, it does mean good news for investors who have certainty around finding tenants for their properties,” REIQ chief executive officer Antonia Mercorella said.
In Brisbane, the city’s vacancy rate remains relatively tight at just 2.8%, despite the fact that vacancies among apartments are on the rise.
“We continue to see strong demand for dwellings in the Brisbane market and despite some commentators who suggest that we are facing a glut the data tells a different story,” Mercorella said.
“New apartments in Brisbane are reportedly being snapped up by investors and owner-occupiers, although the vacancy rate softened slightly, from 3.0% to 3.3%.”
Mercorella said that softening has meant that some landlords have had to take steps to secure tenants. But she claimed there isn’t any cause for concern.
“Local agents are telling us that in order to secure a tenant, rental incentives are being offered,” she said.
“Asking rental prices are also said to be softening in response to the level of supply; however, it is evident that the tenant demand is still there.”
Still in the south east corner of the state, and the Gold Coast saw its vacancy rate drop from 2.3% to 1.7% over the month, while the Fraser Coast recorded a small dip from 3.8% to 3.7% and Toowoomba decreased from 3.1% to 2.7%.
Heading further north, the softer conditions in the state’s rental market become more prevalent.
Over September, Gladstone saw a serious deterioration in its vacancy rate, with vacancies increasing from 5.2% to 7.1%, while Townsville increased from 5.3% to 5.6%.
Conditions are still far from ideal in Mackay, where the vacancy rate remained flat at a state high mark of 9.1%.
Rockhampton saw some improvement, but its vacancy rate still remains relatively high a 4.5%.
Cairns remains the strongest area outside of the south east, with its vacancy rate down to 2.6%.
While Cairns is performing well, it’s hoped the growth being generated in the state’s south east corner will spread across Queensland to help conditions improve.
“The southeast corner is driving growth and this will eventually cascade throughout the rest of the state,” Mercorella said.
“We’re hearing that business confidence is improving in some regional centres as those economies diversify and manage the resources downturn impact.
“In Brisbane, consistently strong capital growth for the past two years gives us reason to be optimistic that equilibrium will be restored in the rest of the state.”
