While Queensland’s rental markets are stabilising in general, five out of six of the regional markets in the state are still under stress and considered "weak", according to the Real Estate Institute of Queensland (REIQ).
The REIQ Residential Rental Survey, taken out across the REIQ-accredited agencies in June 2014, has painted a subdued picture for the six regional markets, and in particular notes high vacancy rates in Gladstone and Mackay.
REIQ acting CEO Antonia Mercorella said rents had been softening in some of the regional centres, particularly mining areas where fly in, fly out (FIFO) has become the trend.
“Median rents from the RTA [Residential Tenancies Authority] continue to soften in Gladstone, Rockhampton and Mackay,” she said.
“Gladstone’s rental market remains in oversupply. However, according to local agents the level of tenant and investor activity has returned to ‘normal’ rental market conditions.”
In comparison to 12 months ago, Gladstone’s median weekly rents have dropped significantly.
For three-bedroom houses, attainable rent is now $150 less, and two-bedroom apartments are down by $140.
Miss Mercorella noted that a similar situation is being seen in Mackay and Rockhampton.
Townsville is now recording the highest vacancy the region has ever recorded in the history of the survey and local agents have noted that below-market rents are putting downward pressure on other rentals.
Toowoomba is the only regional area with a positive story, having kept a tight vacancy rate of 1.5 per cent, up marginally from the end of March. It has not been above two per cent since December 2011.
Here are the figures to date:
March 2014: 4.5%
June 2014: 4.0%
March 2014: 6.4%
June 2014: 5.6%
March 2014: 7.5%
June 2014: 6.8%
March 2014: 5.6%
June 2014: 4.8%
March 2014: 1.4%
June 2014: 1.5%
March 2014: 4.7%
June 2014: 5.4%
For a market to be considered ‘weak’, a vacancy rate of over 3.5 per cent is recorded. For healthy, 2.5 per cent to 3.5 per cent is expected, and for tight anything under 2.5 per cent applies.