Brisbane rents unexpectedly decline as tenants protest,
Brisbane’s asking rents have decreased for the first time in years.
This decline follows a sustained period of record prices that significantly pressured tenants financially.
As a result, many tenants struggled to afford their housing expenses.
According to Domain’s latest Rent Report released on Thursday, weekly asking rents for houses fell by $5.
This represents a decline of 0.8 percent across the city, bringing the average rent to $625 in the September quarter.
Units have decreased by $10, or 1.7 percent, bringing the weekly rent to $590.
Figures for both houses and units are approximately 6 to 7 percent higher compared to this time last year.
Interestingly, Brisbane was one of only two capital cities where house rents declined over the quarter.
This occurred despite a low vacancy rate of 0.9 percent, indicating a tight rental market.
“This represents a significant shift in Brisbane’s rental dynamics,” stated Domain’s chief of research and economics, Dr. Nicola Powell.
She noted that this change follows the city’s longest and steepest growth period ever recorded.
Powell also highlighted how unusual it is to see rents decline in a landlord’s market.
“Brisbane still has a vacancy rate of just 0.9 percent,” she continued.
Although this rate has gradually increased since last year, it remains very tight.
“I can’t emphasize how unusual this situation is,” she added.
“This indicates the financial pressure tenants are experiencing amid rising rents and strong inflation,” Powell explained.
She suggested that tenants are reevaluating their living situations or perhaps accelerating their plans to purchase homes.
However, affordability constraints have significantly slowed rental increases during this time.
Despite the price drop, Powell mentioned that investor confidence remains robust in the market.
Currently, 39 percent of home loans are being financed for investors, surpassing the decade average of 31 percent.
“They are responding to the growth potential of the Games and the anticipated RBA rate cut,” Powell stated.
Although Queensland’s affordability has changed, it remains more affordable than both Sydney and Melbourne, she added.
While the report indicated that rents either declined or stabilized throughout most of the city, some areas still experienced growth.
For instance, weekly asking rents for houses in Brisbane’s inner-city area increased by 1.9 percent, or $15.
This rise occurred over the three months, bringing the average rent in that area to $795.
Receive the latest property news and advice directly in your inbox
At the suburb level, rental price growth was analyzed over a 12-month period.
The report revealed that houses in Albion, located in Brisbane’s inner north, experienced the largest price increase.
Specifically, rents in Albion rose by 25 percent, reaching $750 per week.
Conversely, houses in the inner-city suburb of Teneriffe saw a decline of 5.3 percent, bringing rents down to $900.
Michaela Hully, senior property manager at Coronis Inner North, noted that rent growth has slowed due to rising living costs.
However, she emphasized that this slowdown is not due to a lack of demand in the market.
“We currently have only two vacant homes available,” she explained.
Additionally, there are still areas experiencing strong demand, such as Albion and Lutwyche.
These suburbs are appealing because they are close to the city while being slightly removed from its hustle.
Hully predicted that the slowed rental growth would likely continue.
She attributed this trend to the significant amount of new development currently taking place.
Ray White property management specialist Brittany Krebs identified new rental laws as another factor affecting growth.
Queensland’s rental reforms, effective June 6, banned rent bidding and limited rental increases to once every 12 months.
Additionally, the reforms capped the maximum rent that can be offered in advance.
Krebs expressed her belief that this trend will persist for a while.
“It will take time for everyone to align tenancies with the new rental agreements,” she remarked.
She concluded by stating that these are interesting times in the rental market.
Despite low vacancy rates, investor activity remains mixed, with varying trends in different areas.
Some offices are witnessing investors selling properties while owner-occupiers are buying, particularly on the south side.
In contrast, other offices are experiencing significant growth phases, highlighting market variability.
“Suburbs like Daisy Hill, Marsden, Sunnybank, and Logan are the key growth areas, in my opinion,” Krebs stated.
She pointed out that skyrocketing rents on the Gold Coast are driving increased investor demand in surrounding regions.
Tenants are opting to move to suburbs like Logan instead of paying higher rents in Coomera, creating more opportunities.
Chris Lawsen, principal at Harcourts Inner East, acknowledged that growth has slowed in the current market.
However, he noted that low vacancy rates are still benefiting landlords significantly.
“The market remains buoyant, and there is no reason for investors to be concerned,” he mentioned.
Despite this, Lawson observed that conditions are not as challenging for tenants as they once were.
He described the current situation as a bit of a holding pattern moving forward.
January is expected to be their busiest month, which will serve as a critical indicator of future trends.
Lawson also shared that the high level of investor activity has been a surprising development for their agency.
This unexpected trend is defying previous expectations and contributing to a dynamic market environment.
