All the stars have aligned in Brisbane’s property market for investors, with low vacancy rates, rents increasing and property prices on the rise.
After years of waiting for significant price growth, everything is coming together now, according to real estate professional, Mark Shorrock of Bluestone Property Management & Sales.
“We haven’t seen an increase in the rental market and the sales market in Brisbane for 12 to 13 years,” he says.
Shorrock, guest presenter on a webinar hosted by Hotspotting, says this started to change 12 months ago, boosted by buyers and renters fleeing southern states for Queensland.
Shorrock says while Brisbane was appealing already because of the disparity between its prices and those of Sydney and Melbourne, the pandemic made it even more so.
Brisbane, which was somewhat insulated from the effects of COVID lockdowns, bounced back quickly leading to a significant increase in interstate migration – particularly from Sydney and Melbourne.
Shorrock says in the past Brisbane did not have the jobs to allow for wholesale interstate migration, but that too has changed.
“We’ve seen a number of large national and international companies considering Brisbane as their base again, which is super positive for our property market,” he says.
While other Sydney and Melbourne companies decide they no longer need such a big inner-city presence and that staff can work remotely, more people are turning their attention north.
“If you’re working from the outer suburbs of Sydney remotely five days a week, and there’s no need for you to come into the City office, then you might as well be working in Queensland,” Shorrock says.
While Brisbane locals may baulk at recent rent increases, Shorrock says it doesn’t bother those moving from Sydney and Melbourne, for whom Brisbane rents are cheap.
He says the market is unlike anything he has experienced in 20 years, with up to 70 potential tenants inquiring about each Brisbane rental and upwards of 20 applications received.
On many of these prospective, tenants offer to pay above the asking rent to beat the competition.
“We’re seeing anything from $5-10 a week extra up to $50 a week,” Shorrock says.
Just a year ago it could take up to six weeks to rent a property, but now it’s taking just a few days, with Brisbane’s vacancy rate at 1.4% and falling.
While that’s good news for those looking for new tenants, Shorrock warns investors not to push rents too high with existing tenants.
Landlords may be able to rent for 10% more, but sometimes it was safer to ask good, existing tenants for 5% more, rather than risk having them vacate the property.
Re-renting, even in a hot market, can cost between $1,000 and $1,500, when you factor in a couple of weeks’ vacancy as well as advertising and letting fees, which will quickly erode any extra income derived from upping the rent.
“The trick for any investor is having a good property manager who can help them navigate their way through that,” Shorrock says.
For landlords seeking new tenants, high demand means they can be choosey.
“I know from experience that the tenant prepared to pay the highest rent isn’t always the one that’s the best to accept,” he says. “I would lean towards the long-term tenant because I know from 22 years’ experience that you can make a lot more money with 100% occupancy and slightly less rent.”
He says no matter how hot the market it’s still important to offer well-presented, well-maintained properties and to have a good manager who works hard to achieve multiple applications for the owner to choose from.