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Rental market shows mini boom beginning on Gold, Sunshine Coasts: REIQ Figures

Posted by Tony Moore, Brisbane Times on 30 April 2015
An economic recovery is beginning on the Gold, Sunshine coasts and Greater Brisbane according to the latest rental vacancy rate information from the Real Estate of Queensland.

Rental vacancy rates are frequently seen early indicators of tradesmen and women and professional project managers - moving to areas as new jobs begin to emerge.

A rental vacancy of 2.5 per cent or lower is regarded as a tight market, with rental properties snapped up quickly, suggesting just 2.5 per cent of the rental market is "available" to rent.

The latest Real Estate Institute of Queensland rental vacancy information for the March 2015 quarter shows a recovery in Southeast Queensland.

Rental vacancy rates - March 2015 quarter

Gold Coast - 1.3 per cent;

Ipswich City 2.4 per cent;

Moreton Bay 1.3 per cent;

Sunshine Coast 1.9 per cent;

Toowoomba 3.2 per cent;

Logan City 2.1 per cent;

Greater Brisbane 2.2 per cent;

What the rates mean

REIQ chief executive Antonia Mercorella said rental vacancies were a sign of demand for rental accommodation.

"With housing it is usually about employment," Ms Mercorella said.

"It shows an increase in the level of people moving to the Gold Coast and that is obviously directly connected to the Commonwealth Games," she said.

"We know there is a bunch of tradies who are now living on the Gold Coast because they have moved there to pick up jobs relating to the infrastructure for the Games."

Mr Mercorella said the new Gold Coast University Hospital had also generated new jobs enticing people to the Gold Coast.

"So, on the Gold Coast we are definitely seeing a confidence returning to that market and a desire once again to live on the Gold Coast."

"The Gold Coast has been doing it tough and it is good to see it rebounding."

She said the Sunshine Coast had also seen some recovery despite always being a popular place for renters.

"Vacancy rates are sitting at less than two per cent so that is still a tight rental market," she said.

She agreed in Brisbane there was potential for a large number of additional units to come onto the market at the end of 2015.

Brisbane's rental vacancy rate has dropped from 2.9 per cent to 2.5 per cent.

"We are expecting around 10,000 units to be finalised by the end of this calendar year," she said.

Ms Mercorella said the REIQ understood that would impact Brisbane's supply of apartments and units in 2015-16 and there could be a short-term glut of these properties.

"But when we look at interstate and overseas migration rates we are of the view that those will ultimately be absorbed."

Queensland's net interstate migration is slowing - as reported by Fairfax Media last week, but is still second to Western Australia.

Other Queensland rental vacancy rates

Mackay  - 9.4 per cent

Rockhampton 4.4 per cent

Townsville  - 5.9 per cent

Gladstone 3.8 per cent

Isaac -  17.4 per cent

Whitsunday 13.5 per cent

What that means for regional Queensland

The REIQ data revealed rental problems for traditional mining towns, however Gladstone was recovering, Ms Mercorella said.

Gladstone's vacancy rate has dropped five times since peaking at 7.7 per cent at the end of 2013 and  now sits at 3.8 per cent, she said.

"Looking at the figures for Mackay, Rockhampton and Gladstone it is too soon to call this anything other than what it is a glimmer of hope that a turnaround is imminent," she said.

Ms Mercorella said unemployment was also easing in Mackay and Bundaberg was stabilising, according to their local agents.

Townsville's ongoing unemployment levels continue to have a negative impact on the rental market with the vacancy rate up since the start of the year.

However she said towns that depended on mining were now finding the rental market had eased tremendously.

"Bowen and Moranbah in particular are seeing a significant oversupply of rental properties, which is behind the high vacancy rate for their respective regions overall."

Author:Tony Moore, Brisbane Times

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