The removal of the first home owners grant has driven potential purchasers back to the rental market, according to the Real Estate Institute of Queensland (REIQ).
Results from the REIQ December vacancy rate survey found that the rental market remained tight during what is historically a period of flat consumer demand for rentals.
REIQ CEO Anton Kardash said Queensland’s rental market had been a story of more demand than supply throughout 2012.
“As the year progressed, it became apparent that the continued robust demand for rental properties was not going to ease anytime soon,” he said.
“While sales in the property market did begin to improve in the second half of last year, the removal of the First Home Owners Grant in mid-October resulted in a large number of would-be home buyers remaining in the rental market at the tail-end of last year.”
According to the latest Australia Bureau of Statistics (ABS) housing finance figures, the number of Queensland first home buyers slumped 33 per cent between October and November last year.
At two per cent, the REIQ figures showed that Brisbane’s vacancy rate remained well under the level of a balanced rental market at the end of December.
“Every major region across Queensland, apart from the Fraser Coast and Mackay, had a vacancy rate of less than three per cent at the end of December. A rate of three per cent generally represents a neutral rental market,” Mr Kardash said.
“And for the second consecutive period, Toowoomba posted the tightest rental market, at one per cent, of all major regions across the state.
“According to property managers from REIQ accredited agencies in the Toowoomba region, the consistently strong demand for rental properties from tenants in the area has been driving an increase in investor activity."
REIQ estimates of investor activity from the latest ABS data, found more than 4,250 dwellings were financed to investors across Queensland in November last year - up 14.6 per cent on the previous month.
The vacancy rate on the Sunshine Coast eased to 1.7 per cent at the end of December, down from 2.5 per cent three months before.
According to the REIQ, there was the usual additional demand from new residents during the summer months which had impacted vacancy rates in the region.
On the Gold Coast, the vacancy rate reduced to 2.7 per cent at the end of December – the lowest recorded by the REIQ for the region for more than five years.
Local agents said the region’s tourism sector had improved as had demand for rental properties before Christmas.