How Qld’s rental crisis has shifted post-Covid

Queensland’s rental market has plunged further into crisis, with tenants locked out across the state as rents soar to alarming new highs amid a dwindling supply of available properties.

Exclusive data shows rent for all dwelling types jumped 9.5 per cent in Brisbane and 11 per cent for the rest of the state over the past year.

Regional areas were even worse hit, with rents on the Gold Coast skyrocketing 20 per cent in the last 12 months, and 13 per cent on the Sunshine Coast.

But it is not just southeast markets being whacked hard, with even some of the state’s more far-flung regions also feeling the pinch.

PropTrack’s quarterly Rental Report breakdown by suburb reveals dramatically higher spikes of up to 60 per cent in some outlying areas, with median house rents of $1,100 or more in every one of Qld’s top ten most expensive markets.

The report paints a bleak outlook of mounting pressure as demand shifts from the regions back to city centres.

Brisbane’s rental vacancy spiralled to a new low of just 0.6 per cent in June, according to SQM Research.

Gold Coast mum-of-four Janet Drastil is facing every parent’s nightmare of being separated from her children while she desperately seeks rental accommodation for her family.

Ms Drastil’s eldest two, aged 7 and 4, are staying with her grandparents in a tiny one-bedroom apartment so they can remain in school, while she couch surfs with the two babies, aged 1.5 years and six months, and continues to apply for about 10 rental properties every day.

“We wake up not knowing where we will be sleeping that night, but I haven’t yet stopped thinking positive beside the fact we are homeless with nowhere to live,” the 27-year-old said.

“I stay with friends and family when I can but I constantly feel like we are a burden and I just want some stability for my children.

“I keep saying, ‘don’t worry babies, we’ll be together’, but they say, ‘Mummy, how long will it be?’ and I don’t have the answer anymore,” she said.

Ms Drastil had given birth to her youngest child just days before the landlord knocked on the door of the Pacific Pines house they were renting six months ago, demanding they vacate the property which was to be sold.

She said her partner’s income as a sole contractor didn’t stack up in such a competitive rental market, and they had to give up the temporary accommodation they found.

“We paid up to $900 to $1,000 a week for an Airbnb, but it left us with only $100 for food.”

Grow and Co director Ben Jorgensen said his Southport-based agency received a total of about 700 applications for the 35 properties they’d listed for rent so far this year.

“We hear all the time from tenants who are really worried about finding their next home or having to sleep in their cars,” Mr Jorgensen said.

“They turn up to an open home inspection and get so discouraged when there are 60 other people there that some of them just turn around and leave.

“We try to help people as much as we can, but the reality is there’s just not enough homes available to meet demand.”

He said rising interest rates would put further pressure on the rental market, with many landlords already “hedging their bets” by raising rents.

“Investors see that if they are on a variable rate, it’s only a matter of time before their repayments increase and they will have to rise to the market, so they are already putting the rents up, but also rents are going up simply because of the rate of competition for homes available,” Mr Jorgensen said.

Brisbane retirees Barry and Valerie Elliott helped their three children get a foot on the property ladder, but were left without a home themselves after the February floods.

The couple was unable to secure a suitable rental property in the area, with repairs to their Aspley home of 40 years expected to take six months to complete.

Mr and Mrs Elliott finally secured a lease for a furnished three-bedroom apartment in Southport through Grow and Co this month.

“I’ve only ever owned two houses. I’ve never rented so that’s been a bit of a nightmare,” Mr Elliott said.

“Not having a rental history probably would have gone against us with properties so scarce.

“I tried to put the power in my wife’s name and found she had no credit rating and she’s 72 years old,” the former long haul truck driver said.

Mum-of-three Andrea Ferris found a rental home after sharing her pleas for help, but said displaced tenants faced big obstacles even after securing a new lease.

She had to vacate when her last property was sold, but said her bond was withheld, forcing her to take out a no-interest loan to cover the expense of moving home, including $900 for a bond cleaner and $450 for repairs to damage Ms Ferris said was pre-existing.

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“I feel like I am being held to ransom because the real estate agent knows tenants are too scared of losing their place to speak up,” she said.

PropTrack director of economic research Cameron Kusher said supply remained critical through the second quarter of 2022, though demand had eased in lifestyle markets.

“It appears unlikely that relief is on the way any time soon,” Mr Kusher said.

“The rental increases over the year have been particularly strong in regional markets.

“It’s a somewhat different story over the past quarter, with rental growth making a return in capital cities, while regional markets are showing signs of slowing rental price growth,” he said.

The total number of potential renters per listing was up 28 per cent year-on-year across all Australian capital cities, but down 6 per cent across the combined regional markets.

The data shows Mermaid Beach on the Gold Coast was Qld’s most expensive suburb to rent with a median weekly cost of $1,225. Close behind were Pullenvale in Brisbane’s west and Clear Island Water (Gold Coast), each with asking rent of $1,200.

Across Greater Brisbane, the biggest price hikes were for houses in Munruben, Wamuran, and Chelmer, where weekly rents increased 58, 57, and 53 per cent respectively.

Well-heeled Ascot was one of the few inner-city areas on the list of Brisbane’s 20 suburbs with the largest increases in rent for houses, up 25 per cent to a median of $1,000 a week.

For units, rents in Mount Ommaney were up 34 per cent to $550 a week, while Grange, Bellmere and North Ipswich each climbed about 20 per cent.

For regional Qld, rents increased most for houses in the Sunshine Coast markets of Doonan, Marcus Beach and Glenview, and for units in Woodgate, Rainbow Beach and Lucinda.

But it was not any easier away from those markets.

Up north, rents have soared 41.22 per cent at Kina Beach in the Livingstone Shire, where just 12 homes were rented in the past 12 months.

Tolga (Tablelands), Monto (North Burnett) and Southside (Gympie) have also seen house rents soar by more than 30 per cent as demand outstrips supply.

Even the unit market in the north, which was hammered by rising insurance costs after natural disasters and a glut of supply, has seen extraordinary growth in rents, with Lucinda unit rents up 46.59 per cent.

Unit rents in Bentley Park (Cairns), Mission Beach (Cassowary Coast), Cooee Bay and Meikleville Hill (Livingstone), Calliope, Boyne Island and Kin Kora (Gladstone), West Rockhampton, Gympie and Gulliver (Townsville) also being whacked by rent hikes of between 23.08 and 41.67 per cent.

Many of those regions centre on lifestyle or resources regions.

Mr Kusher said the cautious return of investors to the marketplace was not yet enough to have a significant impact on supply.

Nationwide, investors accounted for 35 per cent of all new lending in May 2022 — down from the peak of 46 per cent in April 2015.

“While more investors will alleviate the imbalance between demand and supply over time, it seems likely that the volume of stock for rent will remain insufficient over the near-term, creating more upward pressure on rental prices.”

Many investors were continuing to sell their properties, with Ray White figures for June showing they accounted for 34 per cent of Brisbane auction vendors, the highest amount since December.

PropTrack’s report comes as the Auditor-General this week handed down findings of a string of failures in the Housing Department’s management of Qld’s social housing register.

It was revealed 8430 of the state’s social housing dwellings have two or more spare bedrooms, while more than 2400 public housing applicants have waited for more than five years.

Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella said applicants falling through the cracks were competing with other prospective tenants, putting “enormous pressure” on private investors.

“When we see tent cities emerging, quite rightly the public is angry, but often private investors are being blamed and this report tells us the government isn’t doing its job as effectively as it should be,” Ms Mercorella said.

REIQ Gold Coast zone chair Andrew Henderson said redevelopment of the coastal fringe had also reduced affordable rental stock where older buildings were replaced with expensive boutique apartments.

“While you don’t want to underdevelop those areas, it creates a very different dynamic when those 1960s unit blocks are replaced by significantly more luxurious, larger accommodation which will rent for four times the price,” he said.

QLD’S TOP 10 MOST EXPENSIVE RENTAL SUBURBS

Mermaid Beach (house) $1,225

Pullenvale (house) $1,200

Surfers Paradise (house) $1,200

Clear Island Waters (house) $1,200

Castaways Beach (house) $1,150

Samford Valley (house) $1,125

Broadbeach Waters (house) $1,100

Sunshine Beach (house) $1,100

Doonan (house) $1,100

Marcus Beach (house) $1,100

*source: PropTrack

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