Are Qld’s record low vacancy rates a ‘new normal’?

The statewide vacancy rate remained at 1 per cent for the quarter, with 19 of the state’s 50 regions experiencing a tightening, 18 remaining unchanged, and just 13 areas experiencing a relaxation of the vacancy rate.

Even with a slight amount of positive movement in some areas, REIQ noted that most changes were modest, in the range of 0.1 per cent to 0.2 per cent. The biggest rises were reported in Cairns, Isaac and the Tablelands, which saw vacancies rise by 0.3 per cent.

Meanwhile, Mount Isa tightened by 0.7 per cent, while Bay Islands and Lockyer Valley both dropped by 0.5 per cent.

REIQ CEO Antonia Mercorella stressed that the long-term nature of the state’s vacancy issues should not cause those in power to feel the issue isn’t urgent.

“While low vacancy rates appear to be the new normal, the new state government should not simply accept this trend,” Mercorella said.

She noted that severe housing shortages in some regions were having a material impact on local economies.

“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,” she said.

Mercorella noted that the body will be watching the new David Crisafulli-led government’s progress on some of its election promises, including the pledge to deliver 1 million homes by 2044, and 53,000 new social and affordable homes.

The CEO described that commitment as “critically important” to addressing the state’s supply woes, adding that she hopes the new government will be looking to cultivate an “investment-friendly regulatory environment”.

Investors urged to heed the market

REIQ also noted that tight vacancy rates should not convince investors into believing that all properties are sure to be rented in record time.

In fact, the body noted that cost-of-living pressures are imposing something of a ceiling on the market, with fierce competition at the more affordable end of the market and higher-priced properties harder to lease.

“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.

“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,” she added.

According to Mercorella, attentive investors are heeding this feedback and adjusting their expectations accordingly.

“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.