Surge in Rental Demand for Brisbane Apartments
A surprise surge in tenant demand for apartments combined with falling interest rates and rising rents looks set to lure property investors back to the Brisbane market after years in the doldrums.
The apartment rental squeeze is getting very tight, with competition between prospective tenants heating up. At the same time rents are on the rise due to a combination of interstate migration, steady economic growth and a decline in new apartments coming to market.
A new report from independent consultancy Urbis has found tenant demand for new inner Brisbane apartments jumped in the first quarter of this year.
The survey revealed a vacancy rate of just 1.6 per cent across 22 apartment projects in inner Brisbane — tightening 0.6 per cent from the previous quarter.
The rebound in the rental market after years of apartment oversupply has even surprised experts, who say the level of demand is greater than expected.
It comes at a time when borrowing money has never been cheaper, with interest rates being cut to an all-time low of 1 per cent this week.
People from the industry report that they are seeing a general tightening in the rental market across the board, including in locations previously reported as having excess new apartment stock available.
The situation is likely to intensify in the months ahead given the expected fall in the number of new apartment projects starting construction, leading to a reduction in availability of high quality apartments.
Local investors who may have been sitting on the sidelines can now buy with greater confidence knowing that there is an abundance of tenants available for the right property and rental yields are strengthening.
The pipeline of new infrastructure coming to inner Brisbane, including Brisbane Metro, Queens Wharf and the proposed South Bank redevelopment, is encouraging new buyers to choose new apartments over established houses.
A new luxury apartment and townhouse development at Newstead, Newstead Series, has put up the no vacancy sign with leasing agent Jones Lang LaSalle reporting a waiting list of people seeking one and two bedroom apartments.
There is a waiting list for the luxury Newstead development, Lucent Gasworks, and in South Brisbane, the first stage of Pradella’s SkyNeedle Apartments also has a zero vacancy rate and a waiting list of prospective tenants.
Urbis property economics and research director Paul Riga also said interstate migration had played a part in the increase in demand for rentals.
“Anecdotal feedback from participants indicated that inquiries from interstate remained solid, and certainly up from the same time last year,” he said.
“Apartments provide these tenants the flexibility of being able to settle into employment and get to know the city and it’s different precincts.”
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The above information has been sourced from Realestate.com.au. To read the full article CLICK HERE.