Since the start of the pandemic, rents have risen almost as much as house prices. Brisbane’s median house price increased by 39 per cent between March 2020 and September 2022. In comparison, rents increased by 34 per cent. While population growth and wealth impacts tell part of the story, flooding was also a factor pulling properties out of the rental market.
With rents rising so quickly, Brisbane needs more property investors. It’s therefore a relief that the state government pulled back on proposed changes to land tax which would’ve discouraged interstate investors. While buyer affordability gets the headlines, rental affordability is far more problematic and will worsen if investors lose confidence in the Brisbane housing market.
The suburbs that have seen the strongest rental growth are a mix of inner and outer suburban areas, reflecting two trends that have also been apparent in buyer markets – a search for space and a search for luxury. Topping the list for rental growth has been houses in Samford Valley, with Point Lookout units coming in second. Rental declines have been seen in units in Chermside West and houses in Newstead, although the declines have been relatively minor.
The outlook for the Brisbane market remains strong. House prices have come back a little bit but aren’t as sensitive as southern states due to lower debt levels. Meanwhile rental growth will continue. Interstate migration may start to slow but international migration is starting up again. Housing supply is being constrained by record high construction costs. Ideally we won’t see any additional taxes on investors or flooding to further challenge the situation.