Rents on rise as vacancies tighten around Central Queensland
RENTERS around Central Queensland are having to dig deeper to cover their increasing rents as rental property vacancy rates tighten to be the lowest in a decade in some areas.
Rockhampton’s vacancy rate plunged from 1.3 per cent in the March quarter to 0.7 per cent in the June quarter – and the lowest quarterly vacancy rate for more than a decade.
Livingstones’s figures are also impressive with the 1.6 per cent vacancy rate in March dropping to 0.9 per cent in June.
At the height of the coronavirus pandemic, the Real Estate Institute of Queensland’s Market Monitor Report for the June Quarter showed regional centres were performing strongly.
About 70 per cent of the state’s rental market is facing extremely tight conditions with 18 per cent of Queensland regions experiencing less than 1 per cent vacancies.
Out west, the tightening was even more pronounced with the Central Highlands recording a staggering 5.4 per cent drop in rental vacancies to 0.8 per cent.
Banana Shire’s vacancy rate dropped 3.4 per cent and Isaac Shire’s rate dropped 2.5 per cent.
In the Rockhampton region, the median rent for a three-bedroom house in the year to June 2020 was $300 per week – up $10 on the previous year.
For two-bedroom units, the annual median was $230 per week which was a rise of $10
per week based on the previous year’s result.
The median gross rental yield for Rockhampton investment houses softened coming in
at 5.7 per cent in the June 2020 quarter – a fall from the 6.1 per cent outcome for March
In Livingstone, the average rent for three bedroom houses has risen $30 per week since last year - higher than the average $10 increase in the Rockhampton and Central Highlands regions.
Notably, Emerald has had a surge of $55 in the cost of rent for three bedroom houses over the past year.
The combination of rising rents, coinciding with the employment hardship created by the coronavirus and Wednesday’s ending of a moratorium on rental evictions, could spell trouble for CQ’s renters.
REIQ Rockhampton Zone chair Noel Livingston said the region had been the picture of
resilience during recent months, with a diverse economic base being part of the solution.
“It’s just powering on – it’s been rock solid. We’ve had no real COVID impact on our
market,” he said.
“We’re not tourist based at all, mining is very strong, and the rural economy is
extremely strong. Cattle prices are through the roof so we’re getting investment from
the bush as well.”
In fact, the property sector’s immunity from the pandemic’s economic fallout is showing
no signs of weakening anytime soon, according to Mr Livingston.
“It’s all looking good for the next year or two here in Rocky.”
For investors, the news remained good in Rockhampton as well, Mr Livingston said.
“Our vacancy rate is so low. I’ve got nothing available for rent in my office at present out
of 300 rentals on the books.”
REIQ chief executive Antonia Mercorella said it was no surprise there’d been a shift in the state’s rental composition to more affordable rental supplies in outer urban and
regional areas during COVID-19.
“On the plus side it helps break up their mono-tenure and supports more local economies to withstand the pressures of the pandemic we’re witnessing in our larger cities,” Ms Mercorella said.
“However, such limited rental supplies have the potential to result in poorly matched housing preferences and impact the urban spatial structure and functioning of these same regions – such as transport costs, labour markets and access to services and amenities.
“It also shows that there’s a decline in government investment in social housing with more low-income renters in the market.”
There was evidence of longer term renting of 10 or more years with some households facing the prospect of a lifelong tenure in this sector.
“What this suggests is that our rental market has changed from its historical role as a transitional housing sector for people moving into home ownership or social housing to a
long-term housing sector for a significant number of Queensland households.
“It’s for these reasons rental vacancies can actually act as a barometer that measures the health of our property market.”