Rental Market Under Pressure in Brisbane, Australia After Lockdown-Driven Migration

People work on new housing at North Lakes in Brisbane, Australia, on June 10, 2016. (Glenn Hunt/Getty Images)

Demand for rental properties remains sky high in the capital city of Queensland, Australia, following months of interstate migration from some of the most heavily locked down cities in the country.

The latest figures from the Australian National University and CoreLogic, a property data firm, showed that rental vacancies in the Greater Brisbane area—around 2.5 million people—had dropped to 1.0 percent in August and 0.9 percent in July.

The figures are more conservative than the findings of SQM Research (pdf), which estimates vacancy rates were as low as 0.7 percent in July.

Nevertheless, the figure is well below the healthy vacancy rate of 2.8 percent over the last five years.

In turn, this has driven up rental prices (and demand) for landlords and tenants, with CoreLogic reporting average rents at A$530 per week (US$357) in August, a 13.3 percent increase from the A$468 (US$315) in the same month last year.

Tenants are now paying around 29.3 percent of their income into rental leases to keep up with the increasing rates—the last time the proportion of rent was so high was around 2008.

Lockdown After Effect Still Lingers

While recent flooding has been blamed for the tightening of available properties for rent, a bigger factor has been the spike in interstate migration from New South Wales and Victoria, which has had a major impact on the local real estate market.

During the COVID-19 years (2020-2021) it is estimated Queensland received around 80,056 new migrants, with the vast majority coming from New South Wales and Victoria, where the capital cities of Sydney and Melbourne experienced some of the toughest lockdowns.

Melbourne, in particular, has held the record for the city enduring the longest period under lockdown.

Brisbane’s more affordable real estate, easier lifestyle, and the advent of work-from-home spurred many big-city Australians to pack up and relocate.

In response, property owners capitalised on the interest from cashed-up interstate buyers, who were likely selling multi-million-dollar Sydney or Melbourne properties.

In fact, CoreLogic reported that from mid-2020 to 2021, average listings in Greater Brisbane increased to nearly 2,000 per month compared to earlier periods where there were only 1,000-1,500 listings.

Renters Feeling the Heat

Real estate agents report these factors have come together to put a squeeze on renters.

First, some property owners became renters themselves after deciding to sell their homes to interstate buyers, effectively adding a new pool of tenants to the market.

Second, some existing renters were forced to vacate their property after it had been sold—forcing them to compete with fellow tenants.

In response, Queensland Treasurer Cameron Dick said the government was “doing our bit” to fix the crisis.

“We’re the place to be, and people are moving here in droves because of good jobs, better services and the great Queensland lifestyle, so we’re doing our bit as a government investing in more housing, opening up more land, which is one of the big challenges, making sure we have more land coming to market,” he told reporters on Sept. 8.

“I know councils are doing their bit, but we all have to do more, and the federal government, of course, has a role to play as well, so we'll continue to do what we have to do as a state.”

Dick said the government was already investing heavily in infrastructure to allow councils to open up more land for development but noted problems in material and worker shortages that have slowed construction build times.

In response, opposition leader David Crisafulli said a summit should be held to deal with the matter and said he would be open to hosting one himself.

“I’m sorry, it can’t be that every council across the state has failed,” he told reporters. “There’s one common theme, and that is the state government.”