Local renters feeling the rental market squeeze

Local renters feeling the rental market squeeze

If you’re a prospective tenant, you will know that finding a rental property is no easy feat in the current property market.

The Gladstone Region experiencing a tight vacancy rate of 1.2 per cent according to the Real Estate Institute of Queensland’s Residential Vacancy Report released last month.

This December quarter figure is a tightening of 0.2 per cent from the September quarter’s 1.4 per cent, and reflects the trend across Queensland, with the 50 local government areas and sub regions reported on all moving minimally.

REIQ Gladstone Zone Chair and LOCATIONS estate agent Principal Alicia Williams said the tight market is simply due to a low housing supply.

“Demand is outstripping supply, with the majority of current supply provided by mum and dad investors,” she said.

“The ongoing building supply shortages and price hikes are also a contributing factor, meaning that new housing stock is extremely slow to come to market to relieve the stock shortages.”

Ms Williams said there was no quick fix or immediate solution to the tight rental market.

“Rather than disincentivizing and driving people away from investing through onerous legislation and tax, recently announced land tax regime and tenancy reforms passed in October were just Phase 1, with Phase 2 to come, the government needs to think outside the box to do more to incentivize property investment in Queensland,” she said.

“They could look at offering free or reduced stamp duty for investors buying, to keep properties on the long-term rental market, or extend first-home buyer grants into established housing.

“Further investment needs to also be made into affordable housing to support the most vulnerable members of our community, which will also take pressure off private investors.”

Going forward it is expected that the sales and rental markets will continue to strengthen, but there is caution around the impact of interest rates increases in the short to medium term.

“For now, established properties are enjoying plenty of capital growth and rental yield, which has been a long-time coming for the Gladstone Region after an extended correction period,” Ms Williams said.

“The positive news is that the growth is more sustainable, making it more achievable for buyers and renters to get into the market, compared to our metro counterparts.”

The Gladstone Region’s rental market experienced a peak vacancy rate of 11.3 per cent in March 2016, and has seen a slow down movement in vacancy rates up until 2019/ 2020, where the rate dropped from 4.1 per cent to below 2 per cent.

The REIQ classes rental markets into three categories, tight (0 – 2.5 per cent), healthy (2.6 – 3.5 per cent) or weak (3.6 per cent plus), according to vacancy rates.

Across Queensland the only areas that tipped into the healthy range during 2021 were within Greater Brisbane.

Bundaberg and Rockhampton are both experiencing extremely tight rental markets at the moment, with both posting vacancy rates of 0.4 per cent in the December 2021 quarter.

 

How to make your rental application a winning one

1)      Provide current contact information for three references – personal, professional, and previous rental history.

2)      Provide 100 points of identification – Driver’s Licence/ Proof of Age Card, Medicare Card, Utilities Bill (telephone, internet, electricity, car registration etc.), Bank Statement or Birth Certificate.

3)      Show evidence of income – your two most recent payslips, your recent Centrelink Income Statement, or your Bank Statements/ Group Certificates if you are self-employed.

4)      Write a cover letter – most landlords don’t require a cover letter but preparing one can set you apart from other applications and increase your chances of securing a rental.

5)      Inspect properties – be on time, be presentable and pleasant at inspections.

6)      If you are applying with more than one person, ensure all applications are submitted together.

7)      Follow up – if you’ve submitted an application and you haven’t heard anything 48 hours later, send a follow-up email to the property manager.