Landlords rejoice! Rents rise $100/wk in parts of Brisbane
RENTS are on the rise after years of flat growth in Brisbane, with new figures showing some suburbs have seen increases of more than $100 a week.
The cost of leasing most homes in the city became $10 to $20 a week more expensive than it was at the start of 2018, with the median rent for a three-bedroom house rising 3.6 per cent to hit $435 a week, according to the latest report from the Real Estate Institute of Queensland.
Rents for two-bedroom units rose even more — up five per cent to a median of $420 a week.
The biggest jump in rent was recorded in the inner west suburb of Ashgrove, where it is now $122 a week more expensive to rent a three-bedroom house than it was this time last year.
The median rent in the suburb is $550 per week, based on a sample size of 23 new bonds.
REIQ chief executive Antonia Mercorella said residential rents across Brisbane had been flat for some time, but were finally starting to rise, which was good news for investors.
Ms Mercorella said inner city properties were still generating flat returns, but some middle to outer suburbs, like Ashgrove, were outperforming.
“It’s such a popular suburb with families because of the access to good schools and it’s so green and leafy,” she said.
Other strong performers were the two clusters of Annerley/Yeronga and Gumdale/Ransome/Wakerley, where median rents rose $60 a week in each postcode group to come in at $500 and $525 a week, respectively.
TOP SUBURBS FOR MEDIAN RENTAL GROWTH HOUSES IN BRISBANE LGA
Suburb Annual rent change %
1. Ashgrove 28.5%
2. Yeronga 14.6%
3. Annerley/Fairfield 13.6%
4. Gumdale/Wakerley 12.9%
5. Hemmant 11.4%
(Source: REIQ, based on 12 mths to December 2018)
The Cosgrove family has lived in Yeronga for the past 20 years and bought an investment property there in 2005.
Darren Cosgrove said they leased their house for $460 a week, but had long-term tenants.
Mr Cosgrove said he was not surprised rents had risen more than 14 per cent in the suburb in the past year.
“There a lot of new builds here now, which would drive that price up — lots of townhouses and premium properties,” he said.
New Farm and Teneriffe remain the most expensive rental options in the Brisbane local government area for three-bedroom houses, with the weekly median rent setting you back $700.
Demand for two-bedroom units in Tingalpa was strong in the December quarter, with a $65 a week increase across the year to $365.
On the flip side, the median rent for two-bedroom units in Manly dropped from $388 a week in December 2017 to $353 a week in December 2018.
The vacancy rate in the Brisbane local government area increased from two per cent in September 2018, to 2.5 per cent in December 2018, with property managers expressing concerns about an oversupply of rental stock.
But Ms Mercorella said it was a healthy result for investors in relation to returns, considering the vacancy measure softened.
Houses in the Brisbane LGA reached gross rental yields of 3.3 per cent in December 2018, while units recorded a higher gross yield of 5.1 per cent, reflecting the increase in the weekly median rent and a gradual fall in unit prices.
“We expect to see a gradual increase in median rents as the dynamics of rental supply and demand continue moving towards equilibrium,” Ms Mercorella said.
“Tenants will still have a variety of rental options available, and many are exercising their right to negotiate on rent levels and potential incentives.
“However, there are indications landlords who have high-quality stock — particularly in well serviced suburbs — are regaining negotiation power in the transaction.”
The Gold Coast is the state’s most expensive rental market for three-bedroom houses and two-bedroom units.
The annual median rental price to December 2018 for houses was $500 a week and $440 a week for units, both of which reflect a $10 a week gain over the year.
The suburbs of Clear Island Waters and Tallebudgera Valley are the most expensive rental markets with annual medians of $850 and $795 a week, respectively.
On the Sunshine Coast, the residential vacancy rate continued to tighten — hitting 1.8 per cent.
According to the REIQ, tourism and strong interstate migration into Queensland is part of the reason why the region’s vacancy rates are sitting in the “more demand than supply” territory.
Reflecting supply constraints, median weekly rents are increasing across the region.
The median rent for a two-bedroom unit on the Sunshine Coast increased $15 a week over the year to be $370.
In Noosa, the median weekly rent for a three-bedroom townhouse skyrocketed by $120 a week over the December quarter.