Real Estate
14 November, 2024
Low vacancy rates ‘normal’
LOW vacancy rates, particularly in the Far North, are ‘the new normal’, according to the Real Estate Institute of Queensland (REIQ).
The REIQ said ‘tight’ vacancy rates for the September 2024 quarter appeared to be ‘the new normal’ for the rental market.
Far North Queensland reported some of the tightest rates in the state – most notably in Cook (zero), Mareeba (0.4 per cent), Tablelands (0.5 per cent) and Cairns (0.9 per cent).
Of the 50 local government areas and sub regions covered in the report, vacancy rates tightened in 19, remained unchanged in 18, and relaxed in 13 this quarter.
Most changes were a modest 0.1-0.2 percentage points. Exceptions included Mount Isa, Redland’s Bay Islands and Lockyer Valley where tightening rates were more pronounced. In contrast, Cairns, Tablelands and Isaac experienced slight rate relaxations.
Overall, low vacancy rates continue to dominate the state, with the vast majority of areas classified as ‘tight’ – about half reporting rates below 1.0 per cent, and a few as low as 0.1 per cent and even zero. The statewide vacancy rate remained at 1.0 per cent.
REIQ chief executive officer Antonia Mercorella said the September quarter results showed the significant work ahead for the new state government to grow housing supply and revive the rental market.
“While low vacancy rates appear to be the new normal, the new state government should not simply accept this trend,” she said.
“These figures may just be numbers, but they carry real human consequences. For example, the scarcity of housing options in Cairns is reportedly making it near impossible for job seekers to relocate there.
“Similarly, some individuals are unable to find suitable rentals in their communities and are left with no option but to move elsewhere.
“We need to be working towards achieving a healthy vacancy rate that meets the housing needs of all Queenslanders and supports the state’s growth.
“That’s why the Crisafulli government’s pledge to deliver one million homes by 2044 – including 53,000 new social and affordable homes – is critically important, as is fostering an investment-friendly regulatory environment.”
Ms Mercorella said that although rental properties were generally leased quickly, cost of living pressures were seeing higher priced properties sit on the market for longer.
“What we’ve been seeing for a while now is a two-speed rental market – where comparatively affordable properties are snapped up rapidly, and higher priced properties are sitting empty and idle for longer,” she said.
“Savvy investors are mindful that a quickly leased property at a reduced price may be more beneficial than a higher price that remains untenanted for weeks – it’s important to listen to the market’s feedback.
“Households are tightening their purse strings and effectively tenants have put their own caps on what they are willing to budget, or can afford, for rent.
“Despite low vacancy rates, this doesn’t guarantee all rentals will be leased quickly, unless prospective tenants can see the value in the property’s amenity, location, or lifestyle.”
