Queensland has started recovering from the effects of the COVID-19 pandemic, with the regional rental markets leading the charge.
COVID-19 has shocked the levels of supply and demand across a number of rental markets in Queensland over the last six months, particularly in the Brisbane CBD, where rental vacancies peaked at 14 per cent last June 2020.
Regions with high levels of supply of transient accommodation such as the Gold Coast have also been affected, with vacancy rate peaking at 10 per cent back in May 2020.
However, unlike the city centre, Gold Coast, along with other regional markets, has made a remarkable recovery in the last six months, recording the tightest rental results, according to the latest vacancy data issued by the Real Estate Institute of Queensland (REIQ).
Queensland’s latest quarterly rental vacancy rates show that 100 per cent of the state’s regions have experienced a drop in vacancies, with 96 per cent falling within a tight rental inventory range (0 to 2.5 per cent) and 4 per cent within a healthy rental inventory range (2.5 to 3.5 per cent) or above.
Figures for July to September 2020 show the Gold Coast’s southern areas recorded some of the lowest vacancies, with an extremely tight median of 0.3 of a percentage point. Looking closer, the suburbs with the lowest vacancy rates were Burleigh Heads (0.4 of a percentage point), Coolangatta (0.2 of a percentage point), Currumbin (0.6 of a percentage point), Palm Beach (0.1 of a percentage point) and Miami (0.4 of a percentage point).
In the Gold Coast’s west, it’s a similar scenario with a mean average of 1 per cent (down from 2.2 per cent) across suburbs such as Mudgeeraba (0.4 of a percentage point), Nerang (0.5 of a percentage point) and Oxenford (0.3 of a percentage point); while up north, tight conditions abound with a median vacancy of 1.3 per cent (down from 3.2 per cent) in areas including Coomera (0.7 of a percentage point), Helensvale (1.6 per cent), Hope Island (1.6 per cent), Southport (1.5 per cent), Pimpama (0.4 of a percentage point) and Upper Coomera (0.7 of a percentage point).
Meanwhile, the downtown Surfers Paradise region fell from 5 per cent to 2.1 per cent, placing it in its tightest conditions in more than two years.
According to REIQ CEO Antonia Mercorella: “With Queensland’s overall quarterly vacancy rate retracting from 2.44 per cent to 1.49 per cent over three months, this is the first time since the outbreak of COVID-19 that every market is showing growth as vacancy rates continue to shrink. Needless to say, our rental market is under enormous pressure, with around 90 per cent of the state now experiencing extremely tight conditions.
“The pandemic has definitely caused a shift for a lot of people in not only the way they want to live but where they want to live, and it seems South-East Queensland is our biggest beneficiary these last three months.”
With a 3.7 per cent boost in new jobs across Queensland during the same three months (approximately 90,000), consumer confidence rising four consecutive months to 98.25 points and a steady in-flow of state migration of almost 30,000 over the last six months, the rental sector plays a critical role in Queensland’s housing system.
In its current condition, the role and size of the state’s investor market has never been so important, Ms Mercorella highlighted.
“As more people choose to make Queensland their home, it’s imperative we act now to support and safeguard the rental housing needs of current and future generations,” she said.
“Over 36 per cent of Queensland’s population rent (1.2 million) and 90 per cent of that housing is provided by private owners. Given the current and future rental needs of the community, it’s critical we continue to attract property investors to improve supply and keep pace with demand and maintain rental affordability.”
The Property Investment Professionals of Australia’s (PIPA) Annual Investor Sentiment Survey 2020 revealed that 67 per cent of investors are still looking to purchase property. Queensland rated highest for investment prospects (36 per cent), with investors keen to look for regional opportunities.
According to Ms Mercorella, private property owners provide the majority of Queensland’s rental housing to the state’s ever-growing tenant community.
“[They] are often incorrectly categorised as wealthy individuals hoarding far more than their fair share of real estate. The reality is, however, very different. These are ‘ordinary’ people comprising hard-working Australians… They have made financial sacrifices to improve their future position for retirement, which is still decades away for most investors,” she said.