Brisbane rents are expected to rise this year as a shortage of vacant properties leads to a market squeeze in the wake of January’s flood.
The rental vacancy rate in the city has fallen from 2.6 per cent to 1.8 per cent since September last year, according to the Real Estate Institute of Queensland. In Brisbane’s inner-city alone the rate has fallen 0.9 per cent to 1.6 per cent.
The true impact of house and unit supply shortages is not expected to become evident until June, as prices remained relatively unchanged for the three months to March, RP Data research analyst Cameron Kusher said.
The median weekly rent for a three-bedroom house remained about $360, while the median weekly rent for a four-bedroom house rose 2.5 per cent to $410 in the last quarter, RP Data’s latest Rental Review showed.
Meanwhile the median weekly rent for a one-bedroom unit remained unchanged at $300 and the median weekly rent rose 1.4 per cent to $350 for a two-bedroom unit.
“With capital growth now flattening and housing affordability stretched … we expect that rental demand will continue to increase during 2011, resulting in further increases in rental rates,” Mr Kusher said.
“Limited new development in 2011 is likely to add to the upwards pressure on capital city rental rates.
“We are now seeing the first signs of yield improvement which is likely to provide a further encouragement for investors looking to strategically position themselves in the market.”
Australian Property Monitors also said the impact of the January flood has not been fully felt in the rental market, with no significant change in median prices over the quarter.
APM senior economist Andrew Wilson said rents would rise in the coming months.
“There was no change in median rents, which given the expected [rental] demand as a consequence of the January floods, was quite surprising,” Dr Wilson said.
“Seeing as the immediate concerns for accommodation seem to have been satisfied and there has been no spike in rental growth, maybe we will have a moderate outcome in terms of rental growth going forward.”
Dr Wilson said he did not expect rental price growth to exceed two per cent each quarter.
Source: Brisbane Times
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