Source: Domain
In a first, Brisbane is now the second most expensive capital city to rent a unit – jointly with Canberra - after median rents rose to a record high of $550 per week.
Brisbane’s median asking unit rent climbed $90 over the past year, or 19.6 per cent, the latest Domain Rent Report for the September quarter,released on Thursday, found, in a record stretch of rent rises that’s fueling extreme rental conditions. The report showed rental vacancy rates remain at a near record low of 0.7 per cent, creating the perfect storm for a rental crisis, experts say, as mounting international migration, a shortage of new developments and decreasing affordability place the once accessible city second only to Sydney for median unit rents.
“For both units and houses, rents remain higher than Melbourne … and because we’ve seen unit rental growth surpass houses for a year now,this speaks to that affordability,” said Domain chief of research and economics Dr Nicola Powell. “And it speaks to where some of the demand is coming from and that’s overseas migration - which is at a record high. “We’ve also seen Brisbane vacancy rates remain below one per cent for almost two years and that’s quite alarming. “Because when you look at population growth for Queensland, it’s at 2.3 per cent and that’s one of the strongest of all the states and territories… it’s creating a melting pot for extreme conditions.”
The report showed median weekly rents for houses also reached a record high of $590 per week across Brisbane after prices rose 7.3 per cent over the year. Powell said encouraging investment activity and boosting government and public housing could quell the perfect storm – particularly in the unit sector.
According to the report, Brisbane’s inner east region is now the most expensive place to rent a house – reaching $758 per week after a slight 1per cent quarterly rise. The city’s CBD is the priciest patch for units at $650 per week following a 1.5 per cent increase.
Houses in the Kenmore, Brookfield and Moggill region – in the city’s west, are the second priciest area for house rents at $750 – a figure that remained stable over the September quarter. Surfers Paradise topped the state for house rents after a colossal 10 per cent quarterly hike pushed median asking rents to $1,100 per week.
“Also, the Australian population has increased by eight million over 25 years but we’ve seen a drop in social housing. “So while a focus area (for the government) is Build to Rent, it isn’t going to solve the problem because it’s so tiny.”
Head of property management Bulimba, Julia Kabakoff, said houses in her sought-after patch had reached extreme heights, with soaring interstate migration rates fueling low vacancies. “Houses are so hard to obtain now … we have so many people moving from interstate and simply nowhere to put them. Mondays are horrendous for us because they are the day you have to decline applications. “I don’t see any significant change, and nothing positive for tenants.”
In the CBD, Ray White Inner Brisbane Apartments business development manager Tupito Merrall said over the past two years she’d witnessed skyrocketing growth in the unit sector, with one-bedroom units now fetching between $650 and $720 per week.
“At the beginning of the year they were renting for $600 … a large portion of the demand is made up of international students – that’s about 50per cent – and the other portion is interstate migrants moving for work,” she said.
