‘Dangerous’: Where rents have soared again in Queensland

6 days ago 8

Queensland’s rental market has deteriorated again, with exclusive new data showing that rents have increased across 252 Queensland suburbs.

The latest PropTrack Quarterly Rent Report shows that tenants are paying up to 15 per cent more now than they were at the end of June, all but reversing any gains made just three months ago.

Back then, the same report recorded median rent falls in 236 suburbs during the June quarter, saving some tenants over $100 a week.

But that reprieve was short-lived, with rents trending up again for house renters in 252 suburbs, and for unit renters in 139 suburbs.

PropTrack senior economist Eleanor Creagh said even a small increase in rents now, after several years of strong rent price growth, was putting significant pressure on renters.

“Rents have increased significantly in recent years, up 60 per cent for houses in regional Queensland since the start of the pandemic (March 2020) and 67 per cent for units,” she said.

“In Brisbane, it is up 53 per cent for both houses and units.

“So any increase on top of that just worsens what has been a significant deterioration on rental affordability.”

PropTrack senior economist Eleanor Creagh Photo: Supplied

Renters in New Farm saw the biggest hike to median house rents in the September quarter — up 15 per cent to $1150 a week, or an extra $150 a week.

17 Gibbon Street, New Farm, will increase from $840 a week to $880 in April.

Double-digit rises were also recorded in Mundingburra and Goondiwindi, both up 11.11 per cent, and Burleigh Heads, up 10 per cent.

Unit rents increased by more than 10 per cent in Hendra and Sandgate.

Median house rents increased by upwards of $100 in just three months in New Farm, Burleigh Heads, Surfers Paradise, Hope Island and Ascot.

12 Curlew Crescent, Burleigh Waters, is listed for $1625 a week, increasing to $1700 a week on Christmas Eve

June 6 marked the start of new laws in Queensland that limit the number of rental increases to once every 12 months, with that applied to the property rather than a tenancy.

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Ray White AKG director Avi Khan, whose group manages over 3000 rentals, said he had no doubt that change had impacted the market, adding that a lack of supply was also fuelling the crisis.

“Landlords have to weigh up their own costs,” he said.

“Many are now taking into account that they can only increase rents once a year so where they may have previously done a smaller increase, now they are going bigger.

“That’s dangerous for the market because some properties are sitting vacant for longer as tenants can’t afford it, or they are paying the increased costs because there is limited choice.”

Principal of Ray White AKG, Avi Khan

And it is clear that the legislative changes are having some impact, for better or wosre, with a number of rental listings specifically mentioning the changes.

1/44 Sheppards Street, Gordonvale, is listed for $420 a week with a note saying that “due to legislation changes regarding rent increases. Rent is discounted to $385 per week until February 2025”.

45/2 Longwood Street, Minyama, is listed for $500 a week, with an “increase to $575 (date to be confirmed) with the required two months’ notice (last increase 29.12.23) in accordance with section 91 of the RTRA Act.”

But it is not just the affluent suburbs where rents are rising.

Some of the state’s more affordable locations are also feeling the heat as renters are pushed further out in order to put an affordable roof over their heads.

Renters in Goondiwindi, which has a razor sharp vacancy rate of just 0.1 per cent, are paying $50 a week more now than in the previous quarter, and $115 more a week now than they were 12 months ago.

There is just one rental available in Goondiwindi, 6 Sloss Road. It is listed for $800 a week and offers a two bedroom cottage on acreage

That marks a median increase in rents in the border town of 29.87 per cent in 12 months.

It is a similar story in Pialba in the Wide Bay region, with renters there forking out an extra $108 a week compared to last year.

On the Sunshine Coast, Minyama house renters have seen their weekly outgoings soar 30.28 per cent in 12 months, the highest in the state.

Up north in Cairns, Palm Cove house renters have seen their median weekly rents increase by $163 in 12 months – up from $693 in September last year to $855 now.

It is not hard to see why Palm Cove is in high demand

In Townsville, house renters in Mundingburra, which had an affordable weekly rent of $450 a week in the previous quarter and at the same time last year, are now paying, on average, $500 a week.

Units in South Townsville are now commanding 16.25 per cent more than a year ago, up from $400 to $465 a week.

In Premier Steven Miles’ electorate of Murrumba, where tent cities popped up earlier this year, median rents have soared by up to 11.63 per cent in 12 months.

Tent city at McKillop Park at Rothwell which is in the Murrumba electorate in April this year. Picture, John Gass

Meanwhile, in Opposition Leader David Crisafulli’s electorate of Broadwater, median rents have mostly fallen over the past 12 months but that’s after astronomical rises during the pandemic.

QLD Premier Steven Miles and LNP leader David Crisafulli during a recent debate. Whoever wins the election, the housing crisis is not going away. Lyndon Mechielsen/Courier Mail

On the flip side, house rents in 140 suburbs have dropped over the quarter, led by Bowen for houses, with tenants saving $55 a week compared to three months ago.

House rents have also dropped by 10 per cent or more since June in Zilzie, Mooroobool and Emerald.

49 Lauriston Street, Bowen, is listed for a relatively affordable $340 a week

In Greater Brisbane, median rents over the last quarter have fallen the most in Herston (units), Carindale (units) Hamilton (houses), Macgregor (houses) and Eatons Hills (houses).

Over the year, the biggest falls were in Hollywell (-12.34%, houses), Wooloowin (-11.76%, houses), Winston (-11.11%, houses), Rockhampton City (-10.42%, units) and Barney Point (-9.86%, units).

35 Salvia Street, Hollywell, is listed for $730 a week

House rents remained unchanged in 143 suburbs across the state during the quarter.

Mr Khan said the one glimmer of hope was the possibility of an interest rate cut by the end of the year, which he said could ease the pressure on landlords, and therefore tenants.

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The RBA cash rate is currently 4.35 per cent, up from a record low of 0.1 per cent in early 2022. Source: RBA

In September, the Property Investment Professionals of Australia (PIPA) annual survey revealed that found that even more investors sold a property over the year to August than they did last year, with about 65 per cent of these former rental properties being purchased by homeowners rather than investors.

Survey respondents indicated they had sold at least one dwelling in Brisbane – 26 per cent of respondents, up from 23.3 per cent last year.

In regional Queensland, 7.4 per cent of investors said they had sold up, down from 16.4 per cent in the 2023 survey.

PIPA chair Nicola McDougall said Queensland had experienced the most investor sales nationally at 33.4 per cent, but that was down from 39.7 per cent the previous year.

The most common reasons for the sell off, according to the survey, were holding and compliance costs such as insurance, minimum housing standards, property management fees and so on (44.1%), followed by increased land tax or government charges (35.4%) and to reduce total debt exposure (32.9%).

PIPA chair Nicola McDougall

Ms Creagh said the only real solution to the affordability crisis was more supply.

“It remains very challenging,” she said, adding demand continued to outstrip supply.

“We have seen vacancies lift slightly in Brisbane but they have fallen in regional Queensland.

“The construction sector remains challenged and population growth remains strong into Queensland.

“We are seeing stabilisation in some markets, or rather conditions are not deteriorating at the same pace as they have previously but even a small increase could be too much for some people.

“The only way to fix that is increase supply of rentals.”

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TOP 10 – Suburb, median rent now, median rent last quarter, % change

BIGGEST RENT INCREASES QoQ – all houses

New Farm $1150 $1000 15%

Mundingburra $500$45011.11%

Goondiwindi $500$45011.11%

Burleigh Heads $1,100 $1,000 10%

Surfers Paradise $1,425$1,300 9.62%

Hope Island $1,150 $1,050 9.52%

Ascot $1,200 $1,100 9.09%

Westlake $850 $780 8.97%