Queensland’s rental market is becoming drastically tight, influenced by the “unique” market behaviour exhibited due to the pandemic.

Latest figures from the Real Estate Institute of Queensland (REIQ) showed that several markets posted vacancy rates that are inches away from zero.

For instance, Maryborough hit a 0.1% vacancy rate over the past year, while Bundaberg (0.4%) and Gympie (0.3%) also reported sub-1% vacancy levels as they grapple from the limited supply of rental properties.

According to REIQ, any region or suburb with a vacancy rate below 2.5% is in tight market conditions.

Even Queensland coastal tourism centres, which include Sunshine Coast (0.5%), Caloundra Coast (0.6%), Gold Coast (0.6%), Fraser Coast (0.6%), Noosa (0.8%), all reported low vacancies on the back of high demand.

Tight rental markets are also observed in these regions:

Of the 50 local government areas and sub regions REIQ monitored, only the areas within Greater Brisbane and Bay Islands have vacancy rates that are considered “healthy” (2.6% to 3.5%).

REIQ CEO Antonia Mercorella said the tightness of the market was due to the “unique” behaviour that was driven by the COVID-19 pandemic.

“We’re experiencing the perfect storm of low housing supply levels, incredibly high interstate and intrastate migration particularly to our regions, longer length tenancies as tenants choose to stay put for greater security and certainty, and less shared tenancies as people want more space now they’re working from home,” she said.

Ms Mercorella said there has not been a time before where tight vacancy rates were so consistently and drastically low across Queensland.

“A rental market as extraordinarily tight as this presents challenges to the local economy and to the community,” she said.

While the current market is favourable from an investor’s perspective, Ms Mercorella said it would not be viable if people struggle to find a place to live, or if they are forced into unsuitable housing.

“Regional areas growing due to new employment prospects will also need to find housing solutions to take advantage of the economic boost a rising population could deliver,” she said.

“For example, Maryborough’s train manufacturing contract is set to support up to 800 jobs over the next decade in the region, but with vacancy sitting at 0.1%, where these workers will live is puzzling.”

Ms Mercorella said this shows how Queensland is in urgent need of additional housing supply to ease these tight conditions and accommodate the surge of people relocating to the state.

“Demand for rental properties in Queensland will continue to rise along with the rising population and that growing population needs a roof over its head,” Ms Mercorella said.

“With international borders opening, over time we’ll see returning numbers of international students, migrants, and holidaymakers, and this too will add to the strain on rental accommodation.”

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Photo by @kaip on Unsplash.