North Burnett renters forced to buy as demand surges
DATA from the Real Estate Institute of Queensland (REIQ) has revealed rental vacancies in Queensland are at an extreme low, with 100 per cent of regions experiencing a drop in available rentals.
CEO of the REIQ Antonia Mercorella said the rental market is under “enormous” pressure as many people are choosing to move to South-East Queensland.
“Over 36 per cent of Queensland’s population rent and 9o per cent of that housing is provided by private owners,” Ms Mercorella said.
“Given the current and future rental needs of the community, it’s critical we continue to attract property investors to improve supply and keep pace with demand.”
According to Gayndah Real Estate agent Jo Dowling, the lack of vacancies has “certainly” been felt in Gayndah.
Mrs Dowling said their office currently has no rental vacancies and they have been run off their feet since COVID hit.
“There’s a certain amount of houses that are normal rentals for backpackers,” she said.
“They’ve all been rented by permanent tenants now, so we have no spare houses available.”
Through the lockdown period, Gayndah Real Estate experienced a spike of inquiries and have seen an increased “confidence” in the market.
“The last couple of months has been exceptional with sales and rentals,” she said.
“We’ve got first home buyers, second home buyers and we’ve also got a lot of investors.”
Mrs Dowling has observed how the current low interest rates and lack of rentals are pushing young people to buy and investors to put their money into the property market.
“Rental returns out here are really good, we’ve got one on sale at the moment for $150,000, with a $240 a week return,” she said.
Mrs Dowling said she has seen reports that people are moving away from the inner city as they now have the option to work from home and would rather a safer environment.
“If someone is moving here and they want to rent a house, there’s nothing to rent so they forced into that second step of buying,” she said.
“If people are paying rent, they might as well be paying a mortgage, because if they’re not here forever they've still got a property they can rent out and get income.”
Mrs Dowling said she can’t see the rental vacancies improving any time soon.
“The ones who are renting are permanent tenants and we haven't got any indication that any of them are moving, so I can't see it easing come the start of the fruit season,” she said.
This provides an opportunity for investors to benefit from the shortage by buying or building a house to rent out.
“For people who’ve got money in the bank sitting there and they’re getting a very low interest return on it, they’re better off to put that money into say a house,” Mrs Dowling said.
It seems investors are already catching on, with the latest figures from the Australian Bureau of Statistics (ABS) showing new loan commitments for property investors have risen by 20.3 per cent over the last four months.
Queensland rated highest for investment prospects, at 36 per cent, with investors keen to look for regional opportunities.