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Wednesday, 14 December 2016

Brisbane next up for vacancies

Vacancies rise

Vacancy rates increased by +0.2 per cent cent nationally in November according to the latest news from SQM Research.

However, asking prices for houses and apartments were also up in most cities in the month. 

Hobart remains by some margin the tightest rental market, despite easing a little, which is happy news for landlords if not for tenants. 

Since Hobart builds mainly detached housing and comparatively very few attached dwellings, provided land is released on a timely basis it should be possible for supply to respond relatively quickly to a tight market and rising prices. 

One of the challenges in the larger capital cities in recent years has been that multi-unit developments can take several years from being conceived to completion. 

In Melbourne, despite apparently high rates of construction, the reported vacancy rate of 2.1 per cent remains well below the 2.4 per cent seen in November 2015, for example.

By the way, you can click on these images to make them larger. 

Not being seasonally adjusted these figures shouldn't really be smoothed in this way, but looking at a 4-month average can help to make some sense of the patterns as they evolve. 

Perth appears to have seen a bit of an improvement in its rental market lately, while Darwin looks to be easing again. 

It's also clear to see from these numbers that the trend in Brisbane vacancy rates is up.

If you're in Brisbane you don't really need a chart to tell you this, you can just see for yourself what's been going on each time you drive close to the Central Business area. 

And anyway, I've uploaded enough more than enough photos for you to peruse over the last two years! 

If you follow the links through the various blog posts I've looked at and photographed all of the main construction hubs in turn. 

Image result for pete wargent blog fortitude valley

As we've already seen, apartment approvals figures have shown that Brisbane DAs have moved well beyond their peak, but there is still plenty of construction in the pipeline in a handful of key inner suburban hubs.

The blue on the map below represents developments under construction, and green denotes approvals. 

As you can see, in Newstead, Fortitude Valley, the 'Gabba, West End, and South Brisbane there has really been a building boom for high-density apartments in the last couple of years. 

It will take some time for this stock to be absorbed, and indirectly there will be an ongoing impact on the rental market elsewhere in Brisbane as younger folks are drawn to cheaper rentals in the inner city and as the oversupply bites.

That said, the rental market is hardly all soft in Brisbane. A client of mine had an offer from a tenant wanting security for a five year lease with incremental rent hikes yesterday. 

To some extent it's largely down to location and dwelling type.


In Sydney, the median asking rent for apartments increased by +4.7 per cent over the year to November, to $509/week.

Asking prices for both houses (+6.8 per cent) and apartments (+5.9 per cent) also increased in Sydney over the year to November,