Regional QLD rental vacancies increasing
Property managers have found themselves in the midst of rent price negotiations between tenants and landlords, as they strive to retain tenants after vacancies increased in Queensland.
As Queensland’s regional rental market shows signs of loosening, property managers must ensure smooth negotiations between tenants and landlords.
PRD Hervey Bay senior property manager, Robyn McKay, said the days of large rent increases were over, as affordability pressures weighed on renters.
“Rental prices are starting to stabilise, so when the opportunity comes for the owner to renew the lease, try to give them as much information as you can about why they should keep the rentals pretty close to what they already have,” she told REB.
“Because that can drive people away. If they get huge increases, they’ll go looking for something else.”
McKay said a compromise was sometimes needed, with landlords usually agreeing to reduce the increase if required.
Despite the Real Estate Institute of Queensland (REIQ)’s latest vacancy data showing a median vacancy rate of 1.0 per cent across the state, 27 of 50 regions saw an increase.
The REIQ noted there were more reports of tenants breaking leases, trading down to cheaper accommodation and higher-priced rentals taking longer to secure a tenant.
CEO Antonia Mercorella said that, like tenants, property owners have also been feeling the affordability pinch, with higher mortgage repayments, insurance, maintenance and compliance costs stretching household budgets.
“Property managers are reporting that some owners are becoming more reluctant to undertake non-essential maintenance and upgrades because they’re finding it harder to absorb the cost,” she said.
The REIQ Residential Vacancy Rate Report showed that Fraser Coast and Hervey Bay’s vacancies were both up by 0.7 percentage points over the quarter, now sitting at 2.2 and 2.3 per cent, respectively.
Meanwhile, Maryborough was up by 0.6pp, Gympie, Mareeba, Caloundra Coast, the Gold Coast, and Burdekin all rose by 0.4pp, now sitting between 1 and 1.5 per cent.
Mercorella said while parts of regional Queensland had been tightening, vacancy rates across the state were still a long way from a healthy rental market.
“Rental markets in these regions could be gradually rebalancing, as new housing comes online with a promising upward trend in the number of building approvals and migration levels continuing to rise but at a slower pace,” she said.
She suggested that on the Fraser Coast, the completion of major construction projects that previously brought temporary workers to the region may also contribute to the rise in vacancies.
“However, what exactly is behind these handful of spiked vacancy rates is difficult to pinpoint,” she said.
“The REIQ cautions against reading too much into quarterly fluctuations when overall vacancy rates remain exceptionally tight across most of the state.”
