The Brisbane Rental Crisis is Explained in 5 Parts

As someone who has just moved to Brisbane, you may wonder why it’s so difficult to find a rental property. The simple answer is that there is more demand than supply at the moment.

This is due to a combination of factors, including a record year of internal migration to Queensland. According to the Australian Bureau of Statistics (ABS), the state’s population swelled by 50,000 interstate migrants over the 12-month period to December 2021. That’s approximately 1,000 people per week becoming Queenslanders!

With more people moving to the state, housing competition increases. This has put pressure on rental prices and availability, especially in Brisbane and Greater Queensland.

According to CoreLogic’s research department head, Eliza Owen, the imbalance between supply and demand strongly impacts the property market.

“Property values have climbed 38.1 per cent since the onset of COVID-19 in March 2020, and rents increased 23.0 per cent in the same period,” Ms Owen stated.

While the figures are great news for landlords and property investors, they are not so great for low-income renters who may struggle to find an affordable home.

We can break down the current situation in Brisbane into five parts.

1. The portion of household income needed to service a new lease is at the highest level since 2009
   Data from ANU and CoreLogic shows that the median household income necessary to cover a new rental lease increased to 29.3 per cent in June 2022. Ms Owen stated that while affordability had been improving since the construction boom in Brisbane during the early 2010s, this has been changing since late 2020.
2. The median rent value across Greater Brisbane has increased to $530 per week
   The median home rent in the last 12 months has increased sharply, with the average renter now required to find an extra $62 per week to cover the cost of renting. Ms Owen commented, “Indexing this median by historic growth in rents, weekly values across Greater Brisbane have increased a record 13.3 per cent from around $468 in August last year”.
3. Rental vacancy rates in Brisbane remain at record lows
   The rental vacancy rate is a measure of the number of available properties in the area that are vacant. In July, CoreLogic’s data shows a record rental vacancy low of 0.9 per cent. In August, it improved slightly to 1%, but this is still around a third of the 5-year average of 2.8 per cent.
4. The total amount of rental listings available is 48 per cent down on the 5-year average
   The total volume of advertised rental properties for the 28 days prior to 8th September has shown a 48% drop over the 5-year rolling average. This severely limited rental stock adds fuel to the rental crisis fire, driving up rental costs further and causing further woes for already overburdened renters.
5. Investors liquidated their properties as housing prices peaked
   2021 saw a peak in the number of investment properties that were sold, as investors capitalized on the phenomenal price growth during the period.

As we reach the final quarter of 2022, it is clear that the rental crisis is far from over. The need for new properties for rent is more acute than ever before. Investors must re-enter the market to help alleviate the supply issues and slow down the rental price trajectory before it entirely pushes more people out of the market.