Nationwide housing demand has surged amid historically low interest rates, fewer people per household and delays in completing new homes.
For Brisbane and Greater Queensland, a record year for in-state migration in 2021 has heightened competition for housing. Property values have climbed 38.1% since the onset of COVID-19 in March 2020, and rents have increased 23.0% over the same period.
Amid rising housing costs, low-income renters are particularly vulnerable to homelessness. According to AHURI’s research, a tight housing market is one of many factors that increase the risk of losing secure housing. Using five key charts, we unpack just how stretched Brisbane’s rental market has become in 2022.
The share of revenue going to service a new lease in Brisbane hit its highest level since 2009
The share of median household income needed to service a new tenancy in Brisbane reached 29.3% in June 2022. This data, compiled by CoreLogic and ANU, compares median house rents to the median estimate of household income in the region. This measure of housing affordability had generally improved since the construction boom in Brisbane in the early 2010s. However, this dynamic is changing since the September quarter 2020, the share of income serving new rents reaching their highest level since 2009.
The median value of rent in Greater Brisbane is $530 per week
CoreLogic calculates median rent assessments for homes across Australia. For Greater Brisbane, the median weekly rent value at the end of August across all dwellings is $530 per week. Indexing that median by historic rental growth, weekly values in Greater Brisbane rose by a record 13.3% from around $468 in August last year.
Rental vacancy rate in Greater Brisbane tends towards record highs
The monthly rental vacancy rate in Greater Brisbane was recorded at 1.0% in August. This is less than half the five-year average of 2.8%. The rental vacancy rate measures the share of vacant and available rental units in a region. In July, CoreLogic estimates that the rental vacancy rate hit a record low of 0.9%.
The total number of rental advertisements is 48% lower in 2022 than the previous five-year average
CoreLogic had 8,208 advertised rentals on the Brisbane market in the 28 days to September 4e. This is -48.2% below the previous five-year average for this time of year. The limited rental stock available has created fierce competition for rental accommodation, which has contributed to rising rental costs.
Investors ‘sold’ as home values peak
The graph below shows ‘for sale’ listings added to the market on a monthly basis in Greater Brisbane that were last advertised for rent in the past eight years. This is a proxy for newly advertised listings of investment properties. The graph indicates an increase in sales of investment properties through 2021, which may have contributed to a shortage of rental supply.
It should be noted that if investors are selling to first-time home buyers, it may actually to relieve some of the pressure from demand in the rental market as people shift from renting to owning. However, if these investment properties are sold to households that are not first-time home buyers, for example, people buying a second home from state to state, there is less chance of relief in rental demand.