As the Queensland sales market kicks into gear, pressure on the rental market has eased according to the Real Estate Institute of Queensland (REIQ).
The REIQ Residential Rental Survey, carried out in December across all REIQ accredited agencies, found the majority of the State recording higher vacancy rates compared to the previous three months.
REIQ chairman Rob Honeycombe said that it was usual for one market to thrive more than the other.
“Over the past few years, it has been the rental sector which has been the better-performing segment of the market,” he said.
“Now while the sales market returns to healthy levels of activity after a period of subdued volumes, the rental market is experiencing a slight easing of vacancy rates after a long period of tight rental conditions. The rental market is also cyclical with January and February being the peak periods for demand.
“While rental markets within the mining regions are struggling with both supply and demand imbalances, the outlook for the rest of the Queensland rental market remains positive as business returns to normal now the Christmas holidays have passed.”
According to the survey data, over one third of REIQ member agencies reported an increase in investor activity which subsequently added stock to the rental pool.
In addition to this, the end of the year is historically a period of lower tenant demand with many vacating over the Christmas and New Year periods, usually in a move to another area for either work or educational reasons. Over recent weeks, however, there has been an increase in enquiry and demand from tenants as is usual for January.
In the Brisbane City local government area, the vacancy rate as at the end of December was 3.2 per cent, up from 2.3 per cent at the end of September. A vacancy rate of around 3 per cent however is deemed to represent healthy levels of supply and demand.
Across Brisbane the results are varied. Inner Brisbane - suburbs within 5km of the CBD - recorded the highest increase, up 1.7 percentage points to 4.1 per cent.
“Local agents have reported a slight oversupply of rental properties with a number of new developments coming onto the market,” Mr Honeycombe said.
“Also at the end of the year we generally experience lower tenant demand as residents vacate for work transfers or the end of the university year. From mid-January, demand increases again as tenants begin their search for their new property.”
“Across the Greater Brisbane area, around 40 per cent of REIQ agents surveyed reported an increase in investor activity; however tenant demand remains strong in most areas, keeping vacancy rates at low levels. The increased investor activity was most notable in the Moreton Bay area.”
In regional Queensland, markets continue to ease substantially in mining regions with Mackay, Rockhampton and Gladstone’s vacancy rates blowing out to around 7 per cent.
Toowoomba continues to post tight rental conditions with a vacancy rate of 1.3 per cent at the end of 2013.
Local agents in Gladstone report a continued glut of rental stock with the market adjusting from a severe lack of supply to an oversupply as multiple new developments have come onto the market. As at the end of December, the vacancy rate came in at 7.7 per cent, up from 5.8 per cent in September and up from 2.1 per cent 12 months ago.
The story in Mackay is very much the same as Gladstone, with some job losses and an oversupply of rental stock within new residential developments. Mackay also recorded a vacancy rate of 7.7 per cent up from 5 per cent three months ago. Local agents report vacancies taking in excess of four weeks to fill and low applicant numbers per listing.
In Toowoomba however, the story is far from bleak. Investor activity is reportedly up, predominantly within close proximity to the Toowoomba metropolitan area, as is tenant demand with one agency reporting very high numbers of applicants recently.
In Queensland’s tourism centres, residential vacancy rates remain at healthy levels. Both the Gold and Sunshine coasts recorded tighter vacancy rates, down 0.4 and 0.3 percentage points respectively since September.