The REIQ March residential vacancy rates released this week show the majority of regions experiencing strong demand from tenants with vacancy rates in many areas now below 3%. A vacancy rate of 3% is generally considered to be the equilibrium point of supply and demand.
REIQ chief executive officer Anton Kardash said the tightening rental market was a result of the slower sales market over the past 12 months in particular.
"Until very recently, we had many potential first home buyers and investors sitting on the sidelines while our market and economy recovered from the natural disasters last year, which has put pressure on our rental market," Mr Kardash said.
"However, this pent-up demand is now starting to dissipate with the latest Australian Bureau of Statistics data showing increasing numbers of investors and first-timers coming back into the market."
ABS lending finance figures for February showed the number of Queensland investors was up significantly compared to the same period last year.
The data also showed that demand from first-home buyers and owner-occupiers was also starting to increase.
"This more robust level of investor demand is good news for our rental market given more investors means more investment stock for renters to choose from," Mr Kardash said.
In Brisbane, the vacancy rate has reduced to 1.7%, from 2.3% in December last year. Brisbane's inner-city recorded a vacancy rate of 1.4%, down from 1.9% in December.
Agents from REIQ inner Brisbane accredited agencies report supply levels remaining limited as tenants stay put, students are settled for the year, and potential first home buyers still opt for a wait-and-see approach.
Investment properties currently up for sale are largely being bought by owner-occupiers which is also contributing to less rental stock overall.
The Gold Coast rental market continues to improve with its vacancy rate falling from 5.2% in June last year to 3.9% in March.
Likewise, the Sunshine Coast has tightened from 4.9% to 3.1% over the same period.
According to REIQ Sunshine Coast zone chair Lloyd Edwards, the rental market has really tightened up in the past few monthswith available vacancies being taken up very quickly.
"The main reasons stated by tenants when they move out has been job relocation and downsizing, showing that the local economic pressures are still underlying," he said.
"The demand for homes over units is apparent on the Sunshine Coast with units seen as a more price-driven decision.
"While at the top end, there is a very strong demand for high end apartments and penthouses with rents from $1000 per week common.
"Faced with high body corporate charges and other holding costs, tenants are seeing a luxury stay as more affordable and desirable then buying at this time."
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