100 people per rental. Vacancy rate in Queensland hits new record.

The rental vacancy rate in Queensland has hit its lowest ever, falling below 1%, with the worst affected region being Brisbane, falling by up to half a per cent. Queensland's vacancy rate has dropped below 1% for the first time.

This latest PropTrack Market Insight report, released on Saturday, shows Brisbane's vacancy rate fell 0.05 percentage points in August to 0.84% - a 59% worse situation compared with the start of the pandemic.

“As a state, Queensland has one of the tightest rental markets in the country, with vacancy rates below 1% in the capital and surrounding areas. Vacancy rates in Queensland are at a new low,” Ms Flaherty said.

PropTrack economist Anne Flaherty said Queensland renters would have to increase their rents for some time due to short supply.

The figures are grim across Queensland, with vacancy rates in Cairns now a worrying 0.6%, Toowoomba 0.62%, Moreton Bay North 0.72%, Brisbane North 0.74%, Ipswich 0 .75%, Brisbane South .79%, Darling Downs-Maranoa .8. pc, Townsville 0.9%, Brisbane East 0.93%, Sunshine Coast 0.93%, Inner Brisbane 0.94, with Logan-Beaudesert and Gold Coast both above 0.97%.

Only four SA4 regions in Queensland currently have rates above 1%: Brisbane West 1.15%, Mackay-Isaac-Whitsunday 1.34%, Central Queensland 1.39%, and Queensland Outback 2.26%.

Queensland's population growth during and after the pandemic has helped limit rent increases over the coming year.

“Since 2022, the rental market in Brisbane has tightened significantly, with vacancy rates down 0.33 ppt year-on-year. In regional Queensland, the vacancy rate fell by 0.16 percentage points month-on-month to 0.94%, while a 0.2-point decline was recorded in the last quarter. “Unfortunately, it is possible that vacancy rates will decline,” Ms. Flaherty said.

“We see it becoming increasingly difficult for first-time buyers to enter the market, we see the population continuing to grow and unfortunately this has coincided with a period where development costs have increased and building a new house is also more expensive. I think market conditions will remain very difficult for renters.

Cashflow Properties founder Bharat Patel, who owns 30 properties, most of them rentals, in Queensland, warned the era of low rents could end as up to 100 people applied to buy some properties.

“Rent prices aren't going to go down, just like gas and grocery prices, they're not going to go down as much as they go up,” he said. “It would be a disaster for the rental market. Sometimes I feel sorry for the tenants but there's nothing we can do; the builders can't build fast enough and there isn't enough inventory.”

Mr Patel said overwhelmed agents were now asking prospective tenants to summarize their suitability in cover letters in response.

“In Logan Central, one property received more than 100 applications, including one approved tenant, so 99 applications were missed. Imagine the number of applications received for each property,” he said.

“Now real estate agents ask for a cover letter stating who you are and your rental history. This is not required by law, but some agencies try to reduce administrative work in this way.

He said investors would continue to be attracted to Queensland's low vacancy rates and high rental returns. “For investors, if rental profits are increasing, it is necessary. This improves your borrowing”.