Brisbane rents have hit record highs making it one of the strongest markets for landlords in Australia. Domain’s latest Rent Report shows rents increased to new highs across every region of Brisbane during the September Quarter, as a result of low vacancy rates, increasing interstate migration and rising property prices. Brisbane’s median weekly rent increased by $10 during the quarter to reach $460 a week for houses and $410 for units. Rents in Brisbane’s west increased by almost 8% to $550 a week. It was the fifth consecutive quarter of increased house rents for Brisbane. Domain chief of economics and research Dr Nicola Powell says there is increasing investor activity in the Brisbane market. She believes the pace of rental growth has now peaked, but as property prices were pushed up at the same time it may be too late for first home buyers trying to get into the market. Despite the rental increases Brisbane is still the third most affordable capital city in Australia for median house rents, and the fourth for units
Gold Coast Rents On The Rise
Brisbane isn’t the only area experiencing rental increases, with the Domain Rent Report showing record highs in other key South-East Queensland markets. The Exodus to Affordable Lifestyle means Gold Coast rents increased 5% in the September Quarter to a median weekly house rent of $630 per week. Unit rents went up 4.2% in the quarter to reach $500 per week. This means rents rose 13.6% in the past 12 months, the strongest rate of annual growth since 2007. RE/MAX Regency Robina property manager Jackie Hardstaff predicts the opening of interstate borders and end of lockdowns in the big cities will put more pressure on SEQ markets. “We are seeing more properties becoming available, but the vacancy rate is still super low … and demand is still just as high,” she says. “It has been hectic. People are lining up to get in. “When we see those borders open back up, we will see another influx and they will be offering higher rates, so I definitely think prices will increase”
Quote of the Week
“We expect reopening boosts to more than offset any initial drags from recently announced macro-prudential measures.”
Westpac chief economist Bill Evans, who says the impact of the APRA measures will be minimal
Cut-price Lenders Counter APRA Moves
Lenders are continuing to offer cut-price interest rates and financial incentives to home buyers despite moves by the financial regulator to rein in borrowing. The Commonwealth Bank and ING both cut their variable interest rates last week for new customers with larger deposits and, according to comparison website RateCity, 28 lenders have cut at least one of their variable rates in the past month. Analysts are predicting the continued competition from banks will reduce the impact of the APRA move to require banks to more cautiously assess home loan customers. Banks must now assess new borrowers at an interest rate 3 percentage points higher than the actual rate of their loan (it was previously 2.5 points). Macquarie analyst Victor German says APRA may need to introduce further measures to counter the banks continued reductions in interest rates
HomeBuilder Drives Record Construction
The construction industry is still feeling the flow-on effects of the Federal Government’s HomeBuilder scheme, with new figures revealing record construction starts. The latest ABS figures show Australia experienced its biggest quarter for construction of detached housing in the three months to 30 June. Building work started on 41,200 houses during the period, an increase of 19.3% on the previous record which was set in 2000. The ABS figures show that in FY2021 work started on 139,195 detached houses throughout Australia, eclipsing the previous record set in FY1999 of 132,777 homes. Housing Industry Association economist Tom Devitt predicts the new record will remain for many years. The Northern Territory had the biggest increase in construction during the June Quarter, with a 73% rise in the number of buildings starting construction. Victoria was up 31%, Tasmania 24% and New South Wales 16%
