Propertyology recently featured in this Channel 7 News story about Brisbane’s rental market.
According to data produced by the Australian Property Investor magazine, several Brisbane suburbs have appear in the Top 10 locations in Australia for the highest rental growth over the last year. Woolloongabba, Sherwood, Bulimba, Kelvin Grove and Highgate Hill have seen increases in median rents of between 8% and 16% over the last 12 months.
This is another example of how changes in median values can be often be misleading. A closer look at Brisbane rents conducted by Propertyology paints a completely different picture; Brisbane rents have remained much the same over the last year, or slightly decreased.
Increases in rents occur when vacancy rates are low (usually sub 2.5%). The increased supply of new properties has resulted in vacancy rates increasing quite considerably over the last year. The fact that a majority of these new properties are more expensive than the established properties means that the new ones are renting for more. When all properties are lumped together, as opposed to looking at individual properties in isolation, it can result in a change in median values suggesting something different to reality.
In all probability, a typical 2-bedroom apartment in any of the suburbs quoted by API would today be rented for the same as 12 months ago, or $5-$10 per week less.
Here are the changes in vacancy rates over the last 12 months:
| May 2013 | May 2014 | ||
| • | Woolloongabba | 2.0% | 4.3% |
| • | Sherwood | 1.7% | 2.7% |
| • | Bulimba | 3.0% | 4.0% |
| • | Kelvin Grove | 2.8% | 4.9% |
| • | Highgate Hill | 2.5% | 3.5% |
