Brisbane landlords are now back in the driver’s seat, with asking rents holding at record high prices, new data shows.
The median asking rent for houses increased from $400 a week to $410 in the December quarter, lifting for the first time in nearly three years – and the latest Domain Rental Report released on Thursday showed those prices continued to hold strong over the first quarter of 2019.
It’s the same story for units, with the median weekly asking rent not going up over the quarter but it did record a slight rise since the same time last year. The median weekly asking rent for a Brisbane unit is now $380, up $5 a week from March 2018.
It’s great news for Brisbane landlords, potentially signalling the end of what had been a tenants’ market for a number of years.
Median weekly asking rent (houses)
March quarter, 2019. Source: Domain Group
“Greater Brisbane’s rental market is slowly changing to favour landlords, with rents rising and yields improving,” Domain senior research analyst Nicola Powell said.
“We know what Brisbane went through was a period of heightened rental supply, thanks to that development boom, but that stock is now being absorbed because the boom is over.
“Added to that is Brisbane’s relative affordability and rising job prospects, which continue to draw residents from interstate. Major infrastructure projects are set to inject significant economic benefit through job creation and spending in the coming years.
“So Brisbane tenants are going to find the rental market is entering new territory. Because the stock is shrinking, the competition to get rentals will increase.”
Median weekly asking rent (units)
March quarter, 2019. Source: Domain Group
But Dr Powell said the pendulum would not swing in landlords’ favour overnight.
“Look, it’s not going to be an instant turnaround for landlords, they’re not going to suddenly see soaring rents — but what we know is that tenants are already finding the choice is narrower,” she said.
“It’s going to be a slow burn as that stock gets absorbed … but all signs point to a tightening of the rental market.”
Brisbane rents may be on the rise, but it is still one of the cheapest capital cities in Australia to rent a house or unit, even coming in more affordable than Hobart for houses.
Only in Adelaide and Perth is it cheaper to rent a house or unit.
The Gold Coast remains Queensland’s most expensive place to rent, with a median rent of $500 a week for houses and $430 a week for units. It’s also one of the tightest rental markets in the state, with a lack of supply continuing the drive in price increases. Houses and units are up 2 and 2.4 per cent respectively over the year.
Eadan Hockings, principal of Living Here Cush Partners at Teneriffe, said most of Brisbane’s rental market was performing really well but was being held back by smaller, investor-led developments.
“The feeling is definitely that good quality product is certainly leaning in the landlord’s favour now,” he said.
“If it’s a nice, spacious unit or a well-renovated home, there are several people turning up to open homes and making their applications more attractive to secure the tenancy.
“However, what we are still seeing is that units of a smaller dimension built by the developers with the intention of maximising profits are still not renting well at all.
“My feeling is that that is holding the whole market back — the rest of the market is performing as well as I’ve ever seen it.”
Mr Hockings said most of the smaller, cookie-cutter units that developers targeted at investors had not recovered from the rental price falls from a few years ago, which had a flow-on effect to better properties.
“That’s a style of product in particular that is going really poorly. They haven’t recovered yet,” he said.
“What that means is that, even when you’ve got a really nice quality unit, tenants are still of the opinion that it’s ‘their market’, so they’re still going hard negotiating with the rent, simply because they’re used to it.”
However, Brisbane’s rental yields remain some of the strongest in the country, with units achieving an impressive 5.23 per cent.
Houses are yielding 4.61 per cent, one of the highest yields of any capital city in the country.
Dr Powell said the tightened supply and increased demand from interstate migrants would continue to put pressure on the market, eventually driving up prices and yields.
“The federal budget’s infrastructure focus, which includes the announcement of fast rail connecting the Sunshine Coast, and the Gold Coast, to Brisbane, will help to boost local confidence, attract interstate residents and place additional demands on the rental market,” she said.
How to attract and keep top tenants in your rental property
Being a landlord isn’t always easy. Dealing with tenants who are bad payers or appear to be on a mission to turn your rental property into a rubbish tip can be time consuming and stressful.
Renters currently have the upper hand in many Australian cities. Inner-city Brisbane, for example, has experienced a high volume of apartment construction in recent years and landlords have had to reduce rents and offer incentives to lock in leases.
With renters able to pick and choose, landlords need to try harder to ensure they attract –and keep – top quality tenants.
Here are some tips for achieving this:
Best face forward
The way you present and market your property will influence the type of interest you receive. If a rental property appears dirty and unkempt, prospective tenants may assume you’ll be equally lackadaisical once they’re in residence. This may be appealing to those who share your ‘relaxed’ approach to home and garden care, but it’s likely to be a turn-off for renters who keep things in proper order. The better the home looks and feels, the higher the calibre of applicants you’ll attract (and the higher the rent you can potentially command).
Faced with the choice between your dwelling and another that’s broadly equivalent, tenants are likely to go for the property that offers extras that add to their comfort. Installing air conditioners in the living room and main bedroom may tip the balance in your favour, or deter good sitting tenants from considering their options during the summer sizzle. Similarly, a dishwasher in the kitchen and freestanding wardrobes in bedrooms that lack built-ins are modest investments that can make a big difference.
Gardening made easy
Not everyone has a green thumb. Ensuring garden maintenance is as easy as possible can make your house or townhouse appealing to renters who may be good payers, but don’t have the time or inclination to mow and prune. Consider providing a green bin, include a monthly or quarterly yard clean-up in the rent and plant shrubs and trees that require minimal TLC.
Lock it up
If you want tenants to take good care of your property, it pays to demonstrate that you’re committed to looking after their personal property too. Installing security that’s appropriate to the home and the neighbourhood can provide peace of mind and make it cheaper and easier for tenants to obtain contents insurance.
Attend to maintenance
Having to ask repeatedly for something to be fixed is irritating, particularly if the request is reasonable. Attending to repairs as soon as possible tells good tenants you respect them and value the relationship. Conversely, making them wait weeks for maintenance requests to be actioned may result in them looking elsewhere for a landlord who can keep up their end of the bargain.
Reasonable rent rises
The market will determine the rent you can charge. If what you’re asking isn’t on par with equivalent dwellings in the same area, renters will assess their options. Should a lease be due to expire and you’re happy with the tenant, it’s wise to be realistic about rent rises – or open to the possibility of a reduction if the market has dropped. Keeping a good tenant is usually easier than finding a replacement
Brisbane has fewer properties for rent but vacancy rate still high
There are fewer homes for rent in Brisbane than a month ago, new figures show. Picture: Thinkstock.Source:ThinkStock
THE number of properties available for rent in Brisbane is shrinking, but it still has the second highest residential vacancy rate of any capital city in the nation.
Data released by SQM Research reveals the Queensland capital’s vacancy rate slipped to 3.2 per cent in March, with 10,246 properties available for rent — down from 3.4 per cent in February.
But the Brisbane rental market is not nearly as tight as some other capital cities, with Hobart and Canberra both sitting on a vacancy rate of just 0.6 per cent.
Only Darwin has a higher vacancy rate at 3.6 per cent.
SQM Research managing director Louis Christopher said asking rents were also rising in some capitals, particularly in Melbourne.
“Reflecting the tight rental conditions in Melbourne, asking rents for houses were up by 1.1 per cent over the month to 12 April 2018, while asking rents rose 4.7 per cent over the year,” Mr Christopher said.
“We can expect continued strong growth given the high population growth that Melbourne is currently experiencing, creating rental demand.”
But in Sydney, the vacancy rate is higher than it was a year ago and asking rents are falling as a result.
Capital city asking rents rose by half a per cent nationally last month to $563 a week for houses.
Unit asking rents rose 0.2 per cent to $443 a week.
The asking rent for a three-bedroom house in Brisbane remains at $447 a week, while for units it stands at $366 — the same as a month ago.
Brisbane renters: You’ve got it cheap, new report shows
Think you’re paying a lot in rent? If you’re in Brisbane, chances are you’re paying less than those living on the Gold Coast, Sunshine Coast and even Redland.
New figures from the Domain Group’s March quarter Rental Report show Brisbane is one of the cheapest capital cities to rent in the entire country, beaten only by Adelaide and Perth, while rising rents in other parts of south-east Queensland have well and truly outstripped Brisbane’s lacklustre rental market.
In the Brisbane LGA, rents have remained flat the entire past 12 months. The median asking rent for houses is still $450 a week, with no yearly or quarterly change. Units have also remained flat over the March quarter, at $390 a week, dropping only slightly by $5 a week since the same time last year.
Units in the Redland LGA are attracting higher rents than those in Brisbane, according to the new Domain report. Photo: Reinhard Dirscherl / Alamy
Meanwhile, on the Gold Coast, the median asking price for a rental house has risen by 6.5 per cent over the past year to hit $490 a week – that’s $30 a week more than this time last year.
Unit rentals have also gone up on the glitter strip by nearly 5 per cent to $430 a week, making the Gold Coast the most expensive region to rent a property in south-east Queensland.
Houses on the Sunshine Coast have a median asking rent of $490 a week, while units in Redland are asking $400 a week. In Ipswich, house rents have increased by 2.9 per cent and units by 3.7 per cent over the past year.
Units and houses on the Gold Coast have the highest weekly median rent asking prices of any of the south-east Queensland LGAs.
But the news isn’t all bad for Brisbane. Stagnated rents were a welcome relief from the ever-increasing cost of living, according to national research manager at PRDnationwide, Dr Diaswati Mardiasmo.
“While these figures may not look particularly exciting, the thing that stands out for me is how affordable Brisbane is,” Dr Mardiasmo said.
“The cost of living is continually going up – rises in electricity, rises in rates, rises in water bills and private health – so to hear that your rent is staying the same will be a relief to so many tenants.”
|WEEKLY MEDIAN ASKING RENTS (HOUSES)|
And tenants who are not stretched financially are far more stable, which benefits landlords too, she said.
“I’m looking at it from the perspective of the renter who can have that stability and affordability but you know, this lack of price increase also benefits landlords,” she said.
“When rents don’t go up, tenants stay where they are. When rents go up, often they’re forced to move out because they can’t afford to pay more. When that happens, often the landlord is left with a vacant property before they can find a new tenant, which is a lot worse.”
Amid the widely publicised unit oversupply and falling unit prices, rental yields have held strong.
Brisbane unit yields sit at 5.06 per cent after strengthening by 2.8 per cent over the March quarter. Yields are also up 1.3 per cent year-on-year.
“When you consider the fear of oversupply and the vacancy rate, these figures are actually quite heartening,” Dr Mardiasmo said.
“There’s been a lot of negative commentary surrounding the unit market in particular, so from an investors point of view, the fact that yields are holding well is comforting.
|MEDIAN WEEKLY ASKING RENT (UNITS)|
REIQ zone chairman Andrew Henderson conceded the Gold Coast was fast becoming a difficult market to break into, for tenants and buyers alike.
“What’s changed recently is the buyers. We used to have 50-50 owner-occupiers and investors but these days 80 per cent of our buyers are owner-occupiers,” he said.
“What that means is that properties that used to be rentals are now being bought by owner-occupiers; the pool of rentals is shrinking.
“At the same time, you’ve got strong migration, so the demand for rentals is increasing. It’s super competitive for applications. And of course, as the cost of renting increases, it’s harder to save to buy a property.”
Dr Mardiasmo said that overall, the Brisbane rental market was “where it should be”.
“I would say to people in Brisbane: look around you. There are other capital cities where people have to commute for an hour-and-a-half just to get to their workplace.
“In Brisbane you only need to live 15 to 20 minutes out to be able to afford a place and still be able to live. We don’t need to wish for figures that make headlines, our situation right now is quite nice.”
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