Owner-occupiers 'hogging' rental stock

Brisbane Times

Owner-occupiers are snapping up former rental properties in prime inner-city locations, putting a further squeeze on Brisbane's already tight rental market, one property analyst says.

Inner-Brisbane areas failed to keep up with rental demand last year and experienced some of the biggest price increases, Michael Matusik from Matusik Property Insights said.

Queensland received 10,350 new rental properties last year against an annual demand of 8880 properties, but despite the perceived over-supply Mr Matusik believes fewer new rental properties were delivered in the areas that needed them most.

Several locations across the state, including inner-Brisbane and Pine Rivers, had not kept up with demand last year, while middle and outer suburbs had produced too many rental properties.

"It is no coincidence that these under-supplied areas saw the greatest lifts in median rents during 2007," Mr Matusik said.

Inner-Brisbane's rental vacancy rate stands at about 1.3 per cent, with little sign of relief on the horizon.

"Many of these older homes are now in prime positions, and they are being increasingly sold to owner residents for greater capital gains rather than being recycled into the rental market.

"This trend is exacerbating the lack of new rental supply."

It was increasingly more difficult to economically deliver new rental properties in central locations. Prime and under-supplied locations were likely to experience the biggest gains again in 2008.

Rents for one-bedroom apartments across the state last year rose by 14 per cent, while the average rent for a three-bedroom house rose by 12 per cent.