SQM Research chief executive Louis Christopher said most markets in Queensland are experiencing severe rental property shortages relative to demand, causing rent increases never seen before in the state.
“We are in a situation where the signs of no vacancy have been displayed for some time,” he said. “Rental rates went up because demand was so high.”
The rental demand is crazy because the available supply is so scarce.
– Stevie Gray, owner of the Gold Coast
Over the past 12 months, rental demands for a home in Maleny, the Sunshine Coast hinterland, have climbed 55.2% – the largest increase in any market, followed by another suburb of Sunshine Coast, Glass House Mountains, with a 51.6 hike in rental rates, data from SQM Research shows.
On the Gold Coast, asking rents at Broadbeach jumped 40.1%, Burleigh by 38.9% and Stradbroke by 38.7%.
Further north in the Whitsundays, rental rates have increased 39% at Queens Beach and 37% at Airlie Beach.
The sharp rise in rents has been a boon for Queensland landlords such as Nathan Trew, who has seen both rents and value climb in his portfolio over the past 12 months.
“I bought a unit on the Gold Coast just before COVID arrived, and the value almost doubled and the rents went up 30%,” he said.
“I’m definitely buying more properties in this area this year because the demand is so high and tenants are willing to pay almost anything just to get a rental.”
Another Gold Coast owner, Stevie Gray, has also reaped great rewards with his investment properties.
“We bought a house in Mudgeeraba last November and its value had already increased by over $ 100,000,” she said. “It is currently rented as an Airbnb home and had been booked from day one.”
She recently bought another house in Oxenford, also on the Gold Coast, which was rented by Meagan Davey to Ray White Labrador on the first visit.
“The rental demand is crazy because the available supply is so scarce,” she said.
Chronic failure to persist
Dilleen Property’s active buying and investing agent Eddie Dilleen, who assisted Mr Trew, said the Gold Coast needs to go further in terms of price and rental growth.
“I think the Gold Coast could see another 20 percent price growth because the rental yields are so high,” he said.
But the under-supply of rental properties has been steadily increasing over the past few years because investors like Mr Trew and Ms Gray have stayed on the sidelines, said Terry Ryder, director of research firm Hotspotting.
“The creation of the rental supply depends on the activity of the investors, and the investors have not been active for three to four years, so gradually the pool of rental properties available is decreasing. It has now reached a critical point, ”he said.
“For years, investors have been put off by the actions of regulator APRA and state governments hitting the housing market with new taxes and fees, which created this rental crisis.
“I think it will take two to three years to bring in the offer, because it takes time to create new homes.”
Tight loans to developers could also hamper the provision of a large-scale supply, Christopher said.
“The rental crisis will persist until developers come to the party in these areas, but I think the banks are still operating a pretty tight ship when it comes to developer lending, which would limit the expansion of the offer, ”he said.
Mr Christopher said local councils should also do more to free up land for subdivisions.
“It’s up to city council to help solve the rent crisis, which they can easily do if they decide to free up more land or change the zoning of the land,” he said. “Are they ready to do it? I do not know. It does not appear that they are.