Brisbane Apartment Rental Market: How is it performing?

Brisbane Vacancy Rate

To begin with, let’s take a look at how Brisbane is doing as a whole. As the graph below shows, the vacancy rate for inner Brisbane has been consistently sitting in the 3-4% range. This has been occurring since roughly mid-2013. The great Brisbane area’s vacancy rate appears to have begun a downward trend, sitting at around 3.4% in December 2017.

Brisbane Vacancy Rate
Source: Real Estate Institute Queensland, Australian Bureau of Statistics. Prepared by Place Advisory

Below, we’ve included the graphs in the report and explained what they mean for investors.

Inner Brisbane Apartment Rental Performance 12 months to March 2018

As the graph shows, demand for one and three bedroom apartments has generally grown across inner Brisbane areas. This is especially apparent in the inner east, north and south areas.

Inner Brisbane Apartment Rental Performance 12 Months to March 2018
Source: Residential Tenancies Authority. Prepared by Place Advisory.

The graph also shows a decrease in demand for two bedroom apartments, which is consistent with what new apartment developments are offering. It’s always important to note the demand for the number of bedrooms in the area you’re choosing to invest in, as it is a key indicator in determining how well your investment will perform. It will also give you insight in regards to your rental prices.

Brisbane CBD

Brisbane’s CBD precinct – which includes Brisbane City and Spring Hill – has seen a very slow market. One one hand, you have the 1.9% decline in two bedroom apartment rentals. On the other, you’ve got similarly disappointing (not better than a decrease) 0% growth in one and three bedroom apartment rents

Inner Brisbane North

Compared to other precincts, Brisbane’s inner north precinct has been a middle performer. In the past 12 months, apartment rent has seen minimal changes. This is reflected in the slight decline of -2% and -0.1% recorded in one and two bedroom apartments, respectively. Three bedroom apartments have seen a slight increase of 0.8%, causing rental growth in this area to increase to 5%.

Brisbane Inner North
Source: Residential Tenancies Authority. Prepared by Place Advisory.

There are also the best performing postcodes for each type of apartment included in the report. 4056 (which includes Ballymore, Ithaca, Kelvin Grove, Normanby and Red Hill) was the best for one bedroom apartments. For two bedroom apartments, you have 4006, which includes Bowen Bridge, Bowen Hills, Fortitude Valley, Herston, Mayne and Newstead. Three bedroom apartments found 4010 to be the best performer, which includes Albion and Breakfast Creek.

Inner Brisbane East

The inner eastern suburbs of Brisbane are clearly the strongest performers. Rent for one bedroom apartments in the area increased by 12% over the 12 months to March 2018, which makes them the best-performing apartments in inner Brisbane. Three bedroom apartments follow this trend, increasing by 7.3%, as did two bedroom apartments, increasing by 1.3% over the same period.

Inner Brisbane East
Source: Residential Tenancies Authority. Prepared by Place Advisory.

The best performing postcodes for inner east Brisbane were 4120, 4151 and 4171. 4120 includes Greenslopes, Loreto Hill, and Stones Corner, which had the most renters in one bedroom apartments. All of Coorparoo falls under 4151, and two bedroom apartments were rented here in force. In 4171, you have Balmoral, Bulimba, Galloways Hill, and Hawthorne, which account for the three bedroom apartment boost in rental growth.

Inner Brisbane South

Similar to the other inner Brisbane precincts, with the exception of inner East Brisbane, rental growth in Brisbane’s inner south has been a mixed bag for apartments. One bedroom apartment rent declined slightly by 1.8% in the precinct whereas two and three bedroom apartment rent increased by 2.3% and 0.5% respectively.

Inner Brisbane South
Source: Residential Tenancies Authority. Prepared by Place Advisory.

The average renting prices for one bedroom apartments in inner south Brisbane were $321. For two bedroom apartments, this rose to $431, which is honestly quite reasonable. At $561, the three bedroom apartments are a smidgen lower than normal, though not by much.

Inner Brisbane West

Brisbane’s inner west area found apartment rental growth difficult to come by over the last 12 months. One bedroom apartments were the only type to report any growth at all, and that was rather insignificant at 0.3%. Two and three bedroom apartments recorded declines of 3.5% and 3% respectively.

Inner Brisbane West
Source: Residential Tenancies Authority. Prepared by Place Advisory.

The best performing postcodes for each property type were 4067 and 4068. 4067, which consists of Ironside, St Lucia and the University of Queensland, actually had the best performance in one and three bedroom apartment types. This is probably due to the University of Queensland – and all of its 60,000 students – being located within that postcode. Indooroopilly, Chelmer, Long Pocket and Taringa, as part of the postcode 4068, were the best performing two bedroom suburb.

So What Do We Take Out of This?

Whilst vacancy rates have increased slightly over recent years in the inner Brisbane areas, data shows us that the new supply (and oversupply) of apartments have largely been absorbed at a sustainable rate. This has helped Brisbane avoid significant vacancies in the market. However, this increased vacancy rate over previous years has resulted in some decline in rental rates throughout Inner Brisbane.

Currently, the Inner Brisbane rental market appears to be stabilising. This is due to residential construction beginning to wind down, with the last significant wave of apartment supply set to enter the marketplace throughout 2018.

Place Advisory expects rental vacancy to remain steady in the short term before beginning to decline as new supply is further absorbed and the resident population continues to increase. As vacancy rates decline, stronger signs of rental growth will inevitably be seen throughout the Inner Brisbane apartment market.

Written: 18 May 2018, Updated: 6 April 2020

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