1. July 2011 No. 487
Rental market
Its strength depends on what you measure.
Assuming interest rates stay on hold, the more immediate direction of
residential real estate is largely dependent on two things – rental growth
and stock for sale. In recent weeks the strength of the rental market has
come into question. So too should the promoted levels of property for sale.
Let’s cover the rental market first. Its strength depends on what you
measure. The typical indicator is a vacancy rate, with an undersupply
traditionally being under 3%. We have argued in previous Snapshots that
2% is a more realistic benchmark. That aside, there are now several
conflicting vacancy rates, with for example, the Qld Govt saying the state’s
vacancy rate is 3.8%, whilst the traditional data houses state it is under 2%.
One measure which seems to hold more water is rental demand i.e. the no.
of agencies reporting a change in the demand for rental accommodation.
This measure appears to have a very strong connection with what happens
to rents. When agents experience a change in demand, rents follow suit in
about three months time. Charts 1 to 3, overleaf, illustrate.
By way of example, inner Brisbane is enjoying some pretty strong rental
growth at present. Agents are reporting a strong lift in demand and as a
result, weekly rents should continue to grow. In contrast, rental demand on
the Gold Coast is weak and so, too, is its rental growth. Charts 4 to 6, again
overleaf, provide more detail.
Now to housing supply – there are about 1,750 dwellings advertised for sale
across inner Brisbane at present. This is up about 10% on this time last year.
In theory, this offers buyers considerable choice and usually asking prices
come under pressure. There is little doubt that we are in a buyer’s market,
but the real level of supply is much more constrained than the various
digital databases suggest.
Our survey work indicates that up to half of the dwellings listed for sale are
“soft” – meaning that the seller isn’t in a rush, will only sell for their asking
price and whilst they would like to sell, they really don’t need to. These
properties really aren’t on the market. Of the 50% left that are keen to sell,
only about one in three are correctly priced. Only properties that are
correctly priced are selling at present.
Under this measure, the reported supply across inner Brisbane drops from
1,750 to about 300 “real” listings.
The Matusik Snapshot is opinion and not advice. Readers should seek their own professional advice
on the subject being discussed. Comments are welcome, contact me on michael@matusik.com.au

2. 1. 4.
Inner Brisbane Apartment rents
Rental demand v growth Queensland locations
$60 Rental demand (RHS) 80% Inner Brisbane $470pw, up 4%
$50 Weekly rent (LHS) 70% Cairns $250pw, no change
60% Gladstone
$40
$300pw, up 30%
50% Gold Coast $350pw, up 4%
$30
40% Mackay $300pw, up 4%
$20
30% Redcliffe $270pw, up 4%
$10 Rockhampton $230pw, up 4%
20%
$0 Sunshine Coast $295pw, down 2%
10%
Toowoomba $210pw, up 4%
-$10 0%
Townsville
Jun-07
Jun-08
Jun-09
Jun-10
Jun-11
Dec-07
Sep-08
Dec-08
Sep-09
Dec-09
Sep-10
Dec-10
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
$270pw, down 2%
$0 $20 $40 $60 $80
Matusik Property Insights, Qld OSER & Qld RTA. Agencies experiencing an Matusik Property Insights, Qld RTA. Actual change in median weekly rent for
increased in rental demand in the last 12 months. Actual annual change in 2-bed apartments between June 2010 and June 2011. Figures show June
median weekly rent. weekly rent and % change over last 12 months.
2. 5.
Gold Coast House rents
Rental demand v growth Queensland locations
$40 Rental demand (RHS) 80% Brisbane City $390pw, up 3%
Weekly rent (LHS) 70% Cairns $310pw, up 3%
$30 60% Gladstone
$400pw, no change $380pw, up 25%
50% Gold Coast
$20
40% Mackay $400pw, up 5%
30% Outer Brisbane $350pw, up 3%
$10
Rockhampton $300pw, up 7%
20%
Sunshine Coast $365pw, no change
$0 10%
Toowoomba $275pw, up 4%
0%
Townsville $335pw, up 2%
Jun-07
Jun-08
Jun-09
Jun-10
Jun-11
Dec-07
Sep-08
Dec-08
Sep-09
Dec-09
Sep-10
Dec-10
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
$0 $20 $40 $60 $80
Matusik Property Insights, Qld OSER & Qld RTA. Agencies experiencing an Matusik Property Insights, Qld RTA. Actual change in median weekly rent for
increased in rental demand in the last 12 months. Actual annual change in 3-bed detached houses between June 2010 and June 2011. Figures show June
median weekly rent. weekly rent and % change over last 12 months.
3. 6.
Regional Queensland Townhouse rents
Rental demand v growth Queensland locations
$40 Rental demand (RHS) 80% Brisbane City $400pw, up 5%
Weekly rent (LHS) 70% Cairns $350pw, up 3%
$30
60% Gladstone
$20 $450pw, up 35%
50% Gold Coast $365pw, up 2%
$10 40% Hervey Bay $300pw, up 7%
30% Mackay $420pw, up 5%
$0
Outer Brisbane $350pw, up 2%
20%
-$10 Sunshine Coast $360pw, no change
10%
Toowoomba $290pw, up 15%
-$20 0%
Townsville $350pw, up 3%
Jun-07
Jun-08
Jun-09
Jun-10
Jun-11
Dec-07
Sep-08
Dec-08
Sep-09
Dec-09
Sep-10
Dec-10
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
$0 $20 $40 $60 $80 $100 $120 $140
Matusik Property Insights, Qld OSER & Qld RTA. Agencies experiencing an Matusik Property Insights, Qld RTA. Actual change in median weekly rent for
increased in rental demand in the last 12 months. Actual annual change in 3-bed townhouses between June 2010 and June 2011. Figures show June
median weekly rent for Townsville. weekly rent and % change over last 12 months.
Michael Matusik
Queensland’s leading independent property analyst
Courier Mail columnist | ABC radio commentator | Author & digital
broadcaster | Public presenter
Michael Matusik is no stranger to the residential property sector. He
has worked in the industry for over 25 years and his firm has helped
around 550 residential projects come to fruition. independent – perceptive - to the point
we make residential work
Michael authors the Matusik Snapshot, a fortnightly subscription
report covering pertinent aspects of the residential property market. Phone 07 3720 9988
Email office@matusik.com.au
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