Gladstone rental market remains ‘extremely tight’
Gladstone’s rental market remains extremely tight as interstate buyers seize up supply, according to the Real Estate Institute of Queensland.
Several real estate agencies gathered for a REIQ conference on Thursday to discuss the latest trends in the Queensland housing market.
REIQ CEO Antonia Mercorella said Gladstone remained as regional Queensland’s strongest housing market as median prices increased 9.1 per cent in the past year.
Ms Mercorella said property owners were also seeing a return, as rental demand remained extremely tight across the region.
“Vacancy rates in Gladstone is around 0.9 per cent and we class anything below 2.5 per cent as a tight market, so Gladstone has a really tight market,” She said.
“We know demand is very strong and the supply isn’t keeping pace with demand.”
Ms Mercorella said interstate migration, low interest rates and returning expats was one of the reasons why rental demand had increased.
“With the region having welcomed plenty of new residents over the past year, the rental sector has not been able to keep up with demand,” she said.
“That said, the region’s less than impressive property market over recent years meant investor activity was subdued as well as building approvals.
“The pandemic is just another element to add to the undersupply of rental property in the region, which unfortunately is not a situation that’s likely to reverse anytime soon.”
Ms Mercorella said the lack of supply had caused rents to significantly increase across the region with the weekly rent for a two-bedroom unit jumping 22.2 per cent to $220 over the year ending December.
The median weekly rent for a three-bedroom house soared 18.8 per cent to $285 per week over the same period.
Ms Mercorella said these types of sharp increases in rents resulted in healthy gross rental yields for investors with the gross rental yield for a house in Gladstone at 4.6 per cent in December.
Ms Mercorella said the commercial and industrial sector remained as a “mix bag” as COVID-19 continued to impact retail statewide.
“It’s hard to know where retail will land,” she said.
“People who shop online are now deciding to shop local to support the local economy but the costs with owning a shop front can be quite substantial.
“Time will tell where that lands.”