Brisbane rent prices slashed by 30 per cent during lockdown but now recovering

Brisbane’s inner-city rental market has finally begun the painful crawl out of its most devastating slump in decades after the mass exit of students, expats and hospitality workers sparked skyrocketing vacancy rates and soaring discounts.

According to the latest rental discounting data compiled by Domain, some of the city’s inner hot spots were forced to slash median weekly rent prices by more than 30 per cent during the COVID-19 pandemic peak in April, with a whopping 636 rental listings still available as of May in Brisbane City alone.

The CBD’s rental discounting rate was still painfully high at 32.9 per cent last month, with Milton not far behind at 32.7 per cent. On the other end of the spectrum, some of the city’s outer suburbs such as Manly scarcely copped a loss at all, with the eastern suburb suffering a rental discount of just 0.9 per cent in May.

But while property pundits warned it could be months to come before the city’s tourist and student reliant hubs found their economic feet, Ray White Brisbane CBD principal Dean Yesberg said in the past couple of weeks alone, life had been breathed back into the industry.

“Since things have reopened, we have seen a rising level of inquiry … and this is from people coming back into the city, who are perhaps getting their jobs back,” Mr Yesberg said.

“But COVID has [still] had a massive impact on the inner-city market due to a couple of factors … we rely heavily on international students and they have either not been able to come or have had to go home.

Source: Domain
State Area Feb-20 Mar-20 Apr-20 May-20
NSW City and East 20.8% 33.4% 38.8% 36.7%
VIC Inner Melbourne 15.7% 23.9% 33.9% 33.2%
 TAS Inner Hobart 15.0% 30.9% 34.7% 24.5%
 QLD Inner Brisbane 14.9% 20.4% 29.5% 24.0%
WA Inner Perth 13.9% 19.2% 24.6% 24%
 ACT Inner South Canberra 9.6% 18% 20.6% 20.9%
 NT Darwin City 19.5% 22.3% 23.4% 19%
 SA Adelaide – Central & Hills 9.9%

“You then have the fact that a lot of the people who rent here in are in hospitality or the service industry and they could not afford to keep their rentals.”

Mr Yesberg said their office boasted a large rent roll across the CBD and, while activity had recently picked up, overall vacancy rates across his inner-city offices’ areas were still sitting at a whopping 84 per cent, reflecting what he said was one of the toughest markets ever for landlords and one of the best for tenants.

“The reality is once the vacancy goes over 5 per cent, it becomes a tenant’s market … so they have got very good opportunities right now. And there’s been a massive correction in prices,” Mr Yesberg said.

“So we are seeing a lot of movement right now … with people moving into better or cheaper accommodation.

“But while it’s the toughest rental market we’ve ever seen, people still need a roof over their head.”

Brisbane rent prices slashed by 30 per cent during lockdown but now recovering (3)

Outside of Brisbane’s student and tourism reliant centres, the Domain data revealed the city’s rental market as a whole weathered the coronavirus storm better than Melbourne and Sydney, with the city reaching an average rental discounting peak of 20.6 per cent in April, compared to 29.9 per cent in Sydney.

Discounting rates then dropped to 16.6 per cent in May for Brisbane, while remaining a still painful 27.7 per cent for Sydney and 25.3 per cent for Melbourne.

Domain senior research analyst Dr Nicola Powell said while the student and expat rental hubs had been hammered by the pandemic, the ease of restrictions and rising confidence had helped ease discounting rates in May in a trend that she said should continue.

“All the capitals in May did see an improvement – but it’s still elevated compared to this time last year … and it’s interesting to see that all capital cities showed the same trend,” Dr Powell said.

Brisbane rent prices slashed by 30 per cent during lockdown but now recovering (2)

“I would expect those rates to keep going down … and now that we have seen governments pushing for holidays at home we may see a pick-up in short-term lets. But until we have our borders open and overseas migration back to normal, we are likely to see quite a high level of discounting.”

While many Brisbane suburbs have undergone a rental price hit, Elyse Potter from Aurora Realty Brisbane said their properties across Bulimba, Morningside and Coorparoo had scarcely felt the pinch.

“There was maybe 10 days when we were talking to owners about a discount … but we weren’t impacted at all. In fact we have been inundated with inquiry over the past two weeks,” Ms Potter said.

Senior property manager at Belle Property Paddington Kylie Steinert, said their office had also largely avoided the need to discount properties, with rental rates remaining steady over the past few months.

“We were lucky in the sense that we didn’t see a spike in our vacancy levels and again this remained constant,” Ms Steinert said.




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