For the first time in years, it now costs more to rent a home in Brisbane than Melbourne, with mass migration and a near two-decade low vacancy rate shooting median asking prices to record heights.
Amid tales of tenant bidding wars and rejected applicants reduced to tears, the latest Domain Rent Report, released Thursday, revealed the average weekly asking price for a house in the Queensland capital soared by almost 8 per cent to an unprecedented $440 per week over the past 12 months – and by 3.5 per cent over the past quarter alone.
The price hike means the average Brisbane tenant is now paying $10 more a week than their Melbourne counterpart for a house, and $25 more a week for a unit after prices for the latter rose by a slightly more modest 3.9 per cent over the year to a record-breaking $400 per week.
Domain senior research analyst Nicola Powell said the report marked a sharp turnaround for the city, with houses, in particular, marking the steepest annual increase in rent prices since 2008 following three strong consecutive quarters of rent gains.
“Melbourne house rents have been higher than Brisbane’s since about 2016 so what we’ve really seen in Brisbane since mid-2020 is an acceleration in asking rents and this really goes against what was happening in the lead up [to the pandemic],” Dr Powell said.
“They had relatively flatlined since 2013.”
Dr Powell said while Queensland had always been a hot destination for interstate migrants, the pandemic and the possibility of remote working had fuelled the trend with the annual number of Australians moving to the state hitting its highest level since 2006.
“Tenants will find less choice, with the pool of available rentals shrinking by one-third compared to last year, pushing Brisbane’s vacancy rate to a multi-year low,” she said.
“House and unit rents held steady or increased in all regions across Greater Brisbane over the March quarter, apart from unit rents in Ipswich sliding a mere $5 a week. Annually, the biggest jump in asking rent was recorded for houses in Brisbane’s north and Moreton Bay North, the steepest annual increase since 2008, up 6.8 per cent and 6.7 per cent annually.”
While rent prices indeed soared across most parts of the city it was the capital’s family-friendly pockets in the middle and even outer rings that shone brightest, with houses in Bald Hills and Everton Park enjoying the biggest annual price rise after surging 10.6 per cent to $520 per week.
Hot on their heels were Kenmore, Brookfield and Moggill, where median asking prices for houses shot up by 8.2 per cent over the same period to an unprecedented $595 per week – a rental price equal only to houses in the inner-city west region.
It’s a rare rental boom that Aurora Realty Brisbane leasing manager Abi Harrington said was reaching eye-watering levels – with their agency currently managing 100,000 tenants actively seeking a home.
“We’ve gone from houses taking three weeks to rent out, to three days and even down to three hours [in the past quarter],” Ms Harrington said.
“You wouldn’t believe the gifts I have received (from desperate tenants) from gin, to flowers to cheesecake and even a bottle of champagne.
“We used to have the policy that a tenant mustn’t apply before they’ve seen the property but now we say apply first if you like the photos … and if you get approved we’ll arrange a private inspection after [because rentals are being snapped up so quickly].”
As for the soaring rents in Everton Park and Bald Hills, Ms Harrington put the increase down to tenants being simply priced out of Brisbane’s more expensive inner pockets, with houses in quiet suburbs boasting a good school catchment the number one lure.
“I’ve just listed a property in Everton Park … and in less than 24 hours I have five inspections booked in … but sometimes we get up to 15 people in the first few hours,” she said.
“This is the height of it and it’s absolute chaos. On average tenants are offering $20 to $30 dollars over the asking price but some people are surpassing that. People from Sydney and Melbourne are cashed up and headed this way because buying a house is far cheaper here and Queensland is the obvious choice as the office doesn’t exist anymore.”
Ms Harrington said soaring interstate migration was a major contributor to rising rent prices, with some southern home hunters willing to fork out $90 per week more in a move that was causing much anxiety among Brisbane residents.
“Locals feel like they’re being pushed out … and I see this getting worse. And it’s not fair on locals living here struggling to meet that price range … and we don’t encourage [bidding wars] because we’re trying to manage expectations,” she said.
Ray White Metro West property manager Stephanie Budrodeen said with rental wars now a common occurrence in hot spots such as Chapel Hill and Kenmore, median prices, in reality, had soared beyond eight per cent to as high as 30, creating a scene more akin to an auction, with the charge being led by Melbourne families particularly desperate to bag a house in a top school catchment.
She said the pandemonium was further fuelled by the “nuts” sales market with some tenants pushed out by owners desperate to sell in a booming market, while others were forced to rent purely because there was nothing to buy.
“Two weeks ago, we just had one property [a two-bedroom unit] left on our rental roll … and that’s never happened before. But the downfall to all of this is owners think their properties are worth more than they are and this is going to make problems for the future when prices are no longer inflated,” Ms Budrodeen said.
“Tenants are in panic mode right now … and in my opinion this a ripple effect from the housing market.”
Article Source: www.domain.com.au
Brisbane Housing Market Insights: May 2021
Brisbane housing market insights for May reveals increased demand for houses and approvals for new units has been underpinned by increasing consumer sentiment and a surge in interstate migration.
This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.
Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.
Brisbane’s typically slow-moving property market has continued to rise as part of a once-in-a-decade boom that experts say could fuel a further 10 per cent rise in house prices in the coming year.
Brisbane house prices have soared to record heights for the seventh consecutive quarter, with tight stock levels and strong demand across all demographics increasing competition.
Investors have also made their way back into the market and competition is heating up.
The latest Corelogic home value index shows Brisbane dwelling prices have risen by 1.7 per cent on a rolling four-week basis.
Brisbane house prices advanced a further 1.8 per cent during April, pushing it up 6.2 per cent for the recent quarter and 9.6 per cent for the year to date.
The current median value for dwellings is $558,295 which is $10,000 higher than just a month ago.
^Source: Corelogic Hedonic Home Value Index – April
The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70 per cent range.
Clearance rates across April notably higher for houses compared to apartments, reflecting broader trends.
Hot spots included Brisbane’s inner city, inner east, inner west and the inner north – where house prices skyrocketed by 13 per cent over the past year to $1.2 million, 13.2 per cent to $1.053 million, 10.4 per cent to $1.17 million and 13.1 per cent to $1.1 million.
Brisbane auction clearance rates
|Week||Clearance rate||Total Auctions|
|Week ending 11 April 2021||80.9%||123|
|Week ending 18 April 2021||72.7%||104|
|Week ending 25 April 2021||76.2%||105|
|Week ending 2 May 2021||76.0%||104|
^Source: Corelogic Auction Clearance Rates – April
Brisbane is experiencing one of the tightest rental markets in a decade on the back of high demand coupled with extremely low supply.
Across April, Brisbane’s rental markets are experienced a tightening of supply, with vacancy rates currently sitting at 1.8 per cent.
Rental returns and yields have significantly increased in Brisbane, with rents soaring from 5 per cent to 15 per cent.
Gross rental yields sit at 4 per cent for houses and 5.2 per cent for units—much higher than other capital cities such as Sydney and Melbourne.
Some of the tightest vacancies across the capital’s suburbs include Anstead (0.5 per cent), Birkdale (0.3 per cent), Capalaba (0.2 per cent), Ferny Hill (0.3 per cent), Gumdale (0.4 per cent), Manly West (0.5 per cent), Rothwell (0.2 per cent), Sandgate (0.5 per cent), Shailer Park (0.4 per cent), Thornside (0.3 per cent) and Wakerley (0.4 per cent).
Brisbane residential rental vacancy rate
|City||April 2021 vacancy rate||Monthly % change|
^Source: SQM Research – April
Rental stock on market
|City||April 2021 vacancies||Vacancy net loss|
^Source: SQM Research – April
Brisbane rent prices
|Type||Rent||Monthly % change||Annual % change|
^Source: SQM Research – April
Brisbane’s housing market has remained particularly unaltered by the closure of international borders, where historically high demand from overseas migrants has been disrupted.
Tight stock levels and strong demand across all demographics have made it incredibly difficult not only to find a property to buy but to also secure something at a reasonable price.
Loan data shows investors have started coming back into a housing market they had largely vacated and the boom is being driven overwhelmingly by established owner occupiers.
Another big part of the demographic buyer base helping drive demand in Brisbane has been first homebuyers.
Brisbane’s proportion of home loans that remained on deferral at the end of March was just 0.7 per cent, indicating a very very low likelihood of distressed selling.
The seasonally adjusted estimate for total dwelling units approved in Queensland in March was 4547, 12.1 per cent up on February’s figures.
Queensland building approvals
^Australian Bureau of Statistics, (Suspension of trend series between May 2020 and Jul 2020 due to Covid-19)
|Dwelling||Approved||Monthly % change|
Queensland home loan lending indicators
|Region||First home buyer loan commitments||First home buyer ratio – dwellings||First home buyer ratio – housing|
^Source: Australian Bureau of Statistics – March
|Region||September (quarter) 2020 arrivals||September (quarter) 2020 departures||September 2020 quarter net|
^Source: Australian Bureau of Statistics – September quarter 2020
Brisbane’s housing market: policy updates
Australia’s central bank will maintain low interest rates to support the country’s ongoing economic recovery and surging housing market, buoyed by its busiest Easter auction market on record.
Strong tailwinds will bolster the Australian economy through the second half of the year, but macro-prudential measures are likely to be introduced to ease house price pressures in 2022.
Queensland faces a “hard road” during the next four years as the state recovers from the coronavirus pandemic, Treasurer Cameron Dick says.
Brisbane housing market forecasts
ANZ economists forecast Brisbane house prices will rise by 9.5 per cent next year, as low interest rates and government stimulus flow through the economy while Commonwealth Bank updated its forecasts, projecting a strong rebound in prices across the second half of 2021.
CBA now expects Brisbane house prices to increase by 16.6 per cent to December 2022 compared to 13.7 per cent in Sydney and 12.4 per cent in Melbourne.
Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 20 per cent between 2022 and 2023.
Article Source: www.theurbandeveloper.com
Subdued Office Occupancy Underpins Need To Support CBD
The latest results of the Property Council’s office occupancy survey show that Brisbane’s CBD activity levels have remained flat during April, as the Property Council ramps up efforts to encourage workers to return to the city.
The survey revealed Brisbane’s CBD occupancy level had stagnated at just over 60 per cent in April, marking the fifth consecutive month of little movement in the return to workplaces.
The Property Council’s Queensland Deputy Executive Director, Jen Williams, explained that while flexibility will continue to be a major feature of workplaces and there remains a small risk of future lockdowns, there is still a long way to go until the CBD reaches the level of occupancy anticipated in the new ‘normal’.
“Activity levels in Brisbane’s office buildings not only affect workplaces and office landlords, but the thousands of small businesses and retailers that rely on high levels of foot traffic to turn a profit.
“All businesses in the CBD are interrelated and largely reliant on office workers. From dry cleaners, to take away outlets, to electronic scooter companies, everyone relies on the consistent foot traffic that workers generate.
“As a direct result of the state’s success in tackling the health pandemic and the relatively low level of restrictions remaining, Brisbane was an early mover in the return of workers to the CBD.
“Unfortunately, we have seen the number of workers heading back into the CBD stagnate over the past five months. To position Brisbane for the future and capitalise on the generations of investment that have gone before, we must break the habits of COVID and get our people back together.
“In other parts of the world where employees have been forced to work from home for longer, businesses are desperate to get back to the office, as they have seen their productivity stagnate.
“With the likes of Google and Apple announcing major return to the office plans once the vaccine rollout allows, Brisbane and Australian businesses will risk losing their first mover advantage if they don’t get their teams back to together.
“This is why the Property Council is working with Brisbane City Council on a campaign to not only attract workers back into the office, but to ensure they make the most of what local retailers, cafes, restaurants, and bars have to offer.
“The State Government and Brisbane City Council’s Brisbane Holiday Dollars initiative is welcome recognition of the important role the CBD plays in contributing to the broader state and economy.
“While much is being done, there is still a long way to go until CBD activity levels return to ‘normal’. The Property Council is keen to work across all levels of government and industry to bring activity back to our city centre.”
Article Source: www.miragenews.com
Major new tenant for Brisbane’s fast growing Airport City
The list of tenants at Brisbane Airport (BNE) will soon include the world’s largest distributor for home-brewing brands such as Still Spirits, Mangrove Jacks, and Grainfather following the sod-turning ceremony for a new facility at the gateway.
Bevie’s 2,600sqm state-of-the-art unit will be located within a Warehousing Industrial Duplex Facility on Grevillea Place in Export Park.
Martin Ryan, Brisbane Airport Corporation’s executive general manager for commercial, joined John van Rensburg, CEO and president of Bevie, and more than 20 Bevie delegates on site to mark the commencement of construction.
Van Rensburg noted that a number of Bevie delegates were able to take advantage of the trans-Tasman travel bubble and fly in from New Zealand for the event.
He enthused: “We are looking forward to calling Brisbane Airport home to our soon-to-be constructed, custom facility, and I cannot wait to see the look on everyone’s face when we move in at the end of the year.
“Our existing facility in Banyo has served us well but providing our team with a modern home will allow us to serve our retail partners across Australia more efficiently.”
Ryan said the addition of Bevie is a perfect example of BNE’s evolving Airport City and our ability to attract non-aviation related businesses to Brisbane Airport.
“Bevie’s arrival is very exciting for all of us at Brisbane Airport as it diversifies the mix of industries we have here on site,” noted Ryan.
“We have a number of exciting projects underway and a property assets portfolio exceeding A$1.7 billion. Bevie is a part of BNE’s exciting future, which includes the opening of the BNE Auto Mall in 2024.”
The remaining portion of Brisbane Airport’s new Warehousing Industrial Duplex Facility is a 1,900sqm site that is still available for lease.
“These two units will complete the last piece of real estate available on Grevillea Place, but we have plenty more sites available for everyone’s needs,” added Ryan.
The project is generating more than 30 construction jobs and is expected to be completed by December 2021.
Article Source: airport-world.com
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