In a previous report, Hobart, Darwin and Canberra saw decreasing home prices while Adelaide, Brisbane and Perth had moderate price growths. But just when many think that Brisbane would be safe from falling home prices, new apartments in the inner city has pushed vacancy rates upward.
According to Domain, as reflected in The Real Estate Institute of Queensland's (REIQ) latest rental report, the vacancy rate for the inner city of Brisbane has hit 3.8 percent in the quarter ending December. The rate is 0.04 percent higher than the previous quarter's 3.4 percent. However, it may be too early to make conclusions. REIQ chief executive officer Antonia Mercorella has stated that vacancy rates were observed to higher in the December quarter historically and she added that it is expected to fall in January.
Mercorella said, "In December 2013, the vacancy rate rose to 4.1 percent and then the next quarter, it fell to 3.1 percent." She continued, "So we can see the December quarter has a history of easing before vacancy rates return to normal in the new year, probably as people relocate over the Christmas period, and we expect the March quarter 2016 will follow this trend."
Domain Group senior economist Andrew Wilson attributes the rise of new apartments in the inner city to its tenant-friendly market. Unlike Mercorella, Wilson thinks that the vacancy rates will most probably stay high. He said, "There is absolutely no doubt that the building boom in the inner city, which has flooded the market, is the biggest factor in vacancy rates rising. With supply clearly moving ahead of demand and new apartment constructions continuing, Brisbane is likely to remain a tenant-friendly market in the future."
It seems that the tenant-friendly city, given the recent increase in residential property prices, has encouraged many developers to supply the market with more homes or apartments.
