You may have seen recent updates in the media about a Brisbane rental crisis. We are now past the traditionally busy January and February period, but this year there is no sign of the rental market slowing down leading into Easter with strong yields and supply shortages.
I am still seeing regular rental increases on inner city houses and apartments of $50 to $100 per week. We recently increased the rent on a two bedroom apartments in New Farm, Teneriffe and Newstead by more than $100 per week. Through my experience actively managing my clients investments along with my recent sales transactions I believe the current surging market has been driven by a combination of interstate migration and young professionals (many first home buyers) being pushed out of the inner city house and land market, preferring to rent in premium inner city locations for lifestyle purposes rather than purchase a house in the outer suburbs. I believe this is also a contributing factor for prices of Brisbane inner city apartments and townhouses showing capital growth the past 12 months for the first time in many years. The influx of first home buyers into the apartment and townhouse market, along with the issues around builders and developers putting projects on hold, I believe are the main contributing factors to the rental supply shortages and growth in rents and property values we are currently seeing. I recently sold an apartment in Kelvin Grove for $75,000 more than an identical apartment in the complex sold 12 months earlier, and my own investment property has also been valued at a 20% increase more than 6 months ago. This has been a welcome relief for many inner city apartment and townhouse investors who hadn’t seen any capital growth in almost a decade.
If you have property investments how is the time to be discussing rent increases with your property manager! particularly considering banks look very flavory upon high rental yields when investors are refinancing and/or looking to grow their property portfolio. It’s also important to keep in mind that good quality long term tenants are extremely valuable, and this should be at the front of your mind when negotiating rent increases. It’s always best to ask your property manager for a comparative market analysis report to assess where the market is at 2 months from your lease renewal date.
As you probably know, Brisbane inner city house and land prices have sky rocketed last two years. In saying that with the ingoing interest rate rises and uncertainty in the market we are seeing prices cooling off and houses taking longer to sell. I recently assisted a client sell a house in Holland Park for $1,100,000, a bit over three years after they purchased it for $630,000. Another recent sale of a freehold townhouse in Annerley resulted in a price $230,000 more than the town house was valued by a property valuer 6 months earlier.
Consecutive interest rates rises will likely continue to slow the market but property prices are still considerably higher than prior to the super cycle we experienced in the 2021 and 2022 Brisbane housing market.
Lets hope these interest rate rises can help us get in control of inflation and we can hopefully see some relief on our morgage repayments in the not too distant future.
If you have been looking for a Brisbane property manager or thinking of selling now is clearly a good time to release some equity given the recent gains in the market… I would be more than happy to assist with a no obligation market appraisal.
Ed Cassidy - 0405 425 345
ed@edcassidy.com.au
www.edcassidy.com.au