Vacancy rate inches up, but supply issues continue to bite
Queensland is still “worlds away from a healthy rental market” as supply issues continue to squeeze the property sector, according to the head of the state’s peak real estate body.
The Real Estate Industry of Queensland’s latest Residential Vacancy Report, which covered more than a decade of quarterly vacancy rat4es for 50 local government areas and sub-regions in the state, showed continued tight conditions in the March quarter.
The statewide vacancy rate inched up slightly, from 0.8% in the December quarter to 0.9% in the March quarter. However, that’s still far short of what REIQ defines as a “healthy” vacancy rate4 of 2.6% to 3.5%.
The vacancy rate rose slightly in most of the state’s tourism centres and coastal regions, REIQ reported. Noosa saw a substantial lift from 1.2% to 2.3%, while neighbouring Gympie rose from 0.7% to 1.1%.
Mount Isa rose to 2.6%, hitting a healthy vacancy rate for the first time since the advent of the COVID-19 pandemic. Gladstone had the highest rate among regional centres at 1.8%.
“Grossly insufficient” supply
REIQ CEO Antonia Mercorella said that while the latest results showed relief in some rental markets, most of the state still faced a crisis.
“Queensland is still worlds away from a healthy rental market, and a grossly insufficient level of housing supply is squarely to blame,” she said. “When we’re witnessing these very tight vacancy rates persisting right across the state, it’s highlighting the importance of ensuring that we keep levels of property investment up so that we can maintain roofs over the heads of our growing population.”
Policies “deter and punish” investors
Mercorella said the supply issue was exacerbated by government policies that stifled property investment.
“We desperately need more rental properties, but investors are not being encouraged to put their savings into property – on the contrary, often they’re being deterred and punished,” she said.
Mercorella said that stifling investment was dangerous due to the state’s heavy reliance on property investors in the rental sector.
“Alarmingly, talk of rent control and imposing greater restrictions on the owners of rental properties is being touted as the solution to the rental crisis,” she said. “Making investment less appealing and demonising investors is not the right solution. We should be focussed on the underlying cause of the rental crisis and increasing housing supply, including social housing.”
According to REIQ, Queensland spends the least per capita on social housing of any state, and even with the state’s Housing Investment Fund, it will only rise to second-to-last.
“This underinvestment reached its nadir in 2015 onwards and has had a direct correlation with the crisis today,” Mercorella said.
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