why low rental vacancies have upside

Why Low Rental Vacancies Have an Upside 

Extremely low rental vacancy rates – now 0.7% in Moreton Bay and 0.9% in Caboolture – are one sign of a very tight rental market. To put this into perspective, the REIQ divides rental markets into three categories (tight, healthy, weak). These markets are broken down into vacancy rates:

  • 0 – 2.5% = tight
  • 2.6 – 3.5% = healthy
  • 3.6% – plus = weak

For those seeking house rentals at the affordable end, there is too much demand in a very tight market. This means some tenants are not getting the opportunity to rent anything at all, as unfortunately only one application can be successful.

Most existing tenants who are moving are now aware that they will need to start looking as soon as possible to give themselves enough time to secure their next property. On the bright side, at Current we have a selection of nice homes available at $450 – $590 per week, which will rent quickly. (See current listings).

Potential Landlords with Empty Houses, We Need You!

rental homes wanted Caboolture, Burpengary

All this means that there is high demand and many appropriate tenants who would dearly love to rent out a tidy apartment or house. 

Some people leave a home vacant just in case they need it or think it’s too much hassle to rent out. Despite the concern about lease lengths, bond, and tenant rights coming into it, you’ll find there is quite a payback on leasing an empty house to make it all worthwhile.

For a modern home, you could be earning circa $450 – $550 per week – plenty to help with the ongoing cost of Council rates, water supply charges, home insurance, and potential land tax. (Land tax is levied on any total taxable land value over $600,000 as on your rates notices). Property managers help with understanding legislation and notice periods.

Latest Rental Price Levels

So, what can you expect if you are renting out a property? In the Caboolture area, unit rentals are around $350 – $450 per week, with the median at $380 pw for two bedroom units. Being in a regional area, it’s more reasonable than the city.

According to Property Pulse by CoreLogic, the national weekly rental value recently hit a record high, a median of $627 per week.  With Queensland having a 130,000 increase in net migration in 2023, all those people need somewhere to live. 

So, if you’ve got an empty home – there’s never been a better time to rent it out.

Current Real Estate Property Managers are always happy to discuss the possibility of renting out your home or investment property and you can find out how much it would be worth on the rental market today. 

Tax Incentives

There has been a lot of public commentary on removing tax incentives, although the political parties have not made any moves as yet. Opponents claim negative gearing and capital gains tax concessions are worsening the housing crisis.

However, at present, tax breaks on rental properties are still available, including depreciation each year and negative gearing. This may mean a lesser income tax bill for the new property owner. Plus, if you sell the house after owning it for more than a year and make a capital gain, only half of that profit is taxed. And if the government do change the rules, it will be more likely for new investors, not existing home rentals.

 

Sources: Vacancy rates from REIQ media release, 29 April 2024, ABS Population Statistics, NineNews ‘Housing Crisis Australia’.