QLD Brisbane inner city rent economics

Any views on what Brisbane inner city rents are doing at the moment and view on direction over coming months and years? Currently inner city yields can still be had at above 5%.

Upward pressure:

1. Interstate migration.
2. International migration to ramp up.
3. People being priced out of buying inner city.
4. Major alpha-city developments eg Queens Wharf etc attracting migration (although this feeds into points 1 & 2).
5. Strict BCC zoning rules unlikely to change.
6. Interest rates fears putting pressure on FHOBs and investors in Sydney and Melbourne (feed into point 1)
7. Lifestyle - less crowded and warmer weather than southern cities and so less fears should Covid becoming endemic.
8. Queensland government appear more in tune with wellbeing of residents.
9. Olympics 2032 and infrastructure build will always be a drawcard in the background.


Downward pressure:

1. Covid disappears and people once again happy with the bustle of Sydney and Melbourne.
2. Transport could be better in Brisbane. However several major projects eg Cross River rail are underway or in planning.


All thoughts appreciated.

 

Apartments or in general?

 

Such a lack of supply of anything except apartments unless people want to live some distance from the city. I just can't see anything except upward pressure on rents.

With inflation biting, maybe time for 6 month leases?

 

I would not be concerned about transport for residents in inner city apartments. It's not like they will rent in the CBD and commute to a suburb.

 

Hearing and reading things that finding a rental in inner Brisbane is like looking for a pot of gold at the end of the rainbow.

To secure apparently people have to have a very good track record and also be willing to pay the highest price.

 

I don’t know about apartments but we listed a house for rent in inner south a few weeks ago and it was rented out 10% above previous rent within 3 days of listing. Agent had to cancel the public open as previous tenant was still living at the property and she didn’t want to take dozens of people through the house based on applications received. She organised one private viewing for already shortlisted applicants and they paid deposit on the spot.

It’s not all good news for landlords though .. maintenance costs have gone through the roof in last few months, some quotes coming in 50-60% above previous years so rents will need to keep rising to absorb rising costs. We received a $500 quote for a 30 min AC service, it previously used to be just a call out fee for AC servicing.

 

It is purely due to a lack of property investors in the marketplace. more than 80% of buyers are owner-occupied purchasers due to the government making it least appealing to investors.
What that has done has reduced the number of rentals hitting the market. You normally have one rental property and a minimum of 10 applications. Landlords are now increasing rents quite easily.

 

We just had one of our townhouses open for lease in Camp Hill on a mid-week afternoon.
One of the less desirable in the complex and 53 registered, 35 parties attended and from what I’ve heard so far, some offers about 10% above asking rent rate.
I’m pretty sure that is by far the strongest turnout for a rental we’ve had over the past 10 years.

 

We just got our city apartment rented out in a week and 15% from before... Still haven't recovered to the previous high, but its a good progress.