"Brisbane continues to prove to be a strong investment not only for growth but for cashflow." - Mitch Connolly, Senior Investment Analyst
New data has revealed just how hard the housing crisis hit Brisbane renters in 2022, with rent up by over 10 per cent for both houses and units as experts warn of not much relief in sight.
Brisbane rents grew by their highest level ever in the 2022 calendar year, with even larger state capitals Sydney and Melbourne delivering single digit percentage increases, according to the latest PropTrack Market Insight Report, out Wednesday.
House rents in Brisbane surged by 11.6 per cent year-on-year to $530 a week, with unit dwellers also hit with a 10 per cent rise to a weekly median of $440.
PropTrack economic research director Cameron Kusher warned it was “the strongest calendar year growth on record for Brisbane” with not much relief in sight for 2023 either.
”There’s just not enough stock. Landlords have had scope to put up rents quite significantly and there’s no sign of that really changing in 2023.”
He said low volumes of listings on the market, continued strong enquiries for rentals and properties leasing out rapidly were all conditions that would push rents up in 2023.
He said January was the peak period for the rental market, when more properties than usual would become available.
“We’ll get a view this month of what things look like. January we usually see supply improve quite rapidly, and a lot of renters would really welcome that.”
But he said a pause in increases for renters was “not imminent”.
“We expect rents will continue to rise in 2023, but maybe not to the same magnitude as this past year. There are not many signs of slowing down of demand, and there’s no real indication of any increase in supply of rental stock either. Given that, we will see fairly strong rental (price) growth in 2023”.
Prominent Brisbane real estate agent and auctioneer, Haesley Cush of Living here Cush Partners and co-principal of five Ray White agencies including New Farm, said hundreds of displaced families during floods and opening of borders drove strong demand in 2022 across Brisbane.
He expected some easing in the number of people competing for rental properties, with this year set to be “not at the same feverish pitch as last year”.
But he said conditions were still not right for rent to fall.
“I can’t see a reason why rents would fall. If you look at the city, a lot of people are moving here and most will rent before they buy. There will be people who may choose to rent for a bit longer before they step into the sales market because they want to see some predictability with rates. Rents are capped for the period of the lease and people like that.”
KPMG director planning and infrastructure economics Terry Rawnsley warned structural undersupply of housing in South East Queensland would “start to become a handbrake to economic growth” unless addressed.
“Every time a business tries to employ someone, housing affordability will be a challenge for them,” he said. “Businesses want to hire but can’t get workers because of housing costs.”
“We were building 50,000 homes a year, we need 60,000.”
“People coming to fill jobs in Brisbane want to make sure there’s available housing. The market is so tight, there are no homes available … that’s the handbrake.”
Overall rent was up 11.4 per cent in Brisbane in 2022, compared to a 7.3 per cent rise for calendar year 2021. PropTrack data showed the highest year-on-year spike Brisbane has seen for rents at any point during the year was 15.3 per cent notched last quarter.
And while house rents dominated growth in 2021, in 2022 unit rents have climbed significantly as more people return to the inner city post-pandemic. The surge is significant considering the 2021 calendar year saw a 10.5 per cent rise for house rents in Brisbane and 3.9 per cent for units.
Source: Realestate.com.au