It will take a large shift in Brisbane’s housing market if investors are to see any increase in rents in the near future, experts say.
It comes as the latest Domain Rental Report shows rents were flat in Brisbane over the December quarter.
The median asking rent for houses is still $400 a week, with no yearly or quarterly change. Units rents are now slightly weaker, at $370 a week, down from the same time last year, when landlords were asking $375.
Domain data scientist Nicola Powell said stagnated rent had been the norm in Brisbane for five years or more. Dr Powell didn’t expect that to change any time soon.
“I think it will take a large shift in the market. These tighter lending conditions will make it harder for investors to get finance,” she said. “It will take a while to see an output in terms of increased rents.”
Dr Powell said housing stock was tightening, but not enough to counteract the recent influx of apartments.
“We’re already seeing the advertised stock in the greater Brisbane area decline and that is for houses and for units,” she said. “In the unit market they’re still impacted by oversupply.”
Partner at Living Here property management Haesley Cush said the news came as little surprise.
“The last 12 months has seen a number of new accommodation precincts come out of the ground. What that does is drag down the median price,” he said. “They’ve offered huge incentives and it’s left mum and dad investors unable to compete.”
Mr Cush said until landlords were financially pushed into a corner, they wouldn’t be too concerned about the flat rents. “They’ve been a little more accepting of lower rents and may not be expecting year-on-year growth,” he said. “At the moment it’s easier for a decrease to happen in the market, because of the low interest rates.
“But if there was a rise in interest rates, landlords would be more bullish.”
Dr Powell said that it wasn’t all bad news for Brisbane though. Despite flat prices and declining yields for both houses and units (down 0.3 per cent and 0.2 per cent, respectively), she said the river city still had the benefit of the third-highest yields in the country.
Originally Published: www.domain.com.au