Queensland Property Investment: Queensland renters paying above asking price to secure housing in competitive market

Families looking for rental properties in Greater Brisbane are facing intense competition in the tightest market in 10 years, with prospective tenants offering above the asking price just to secure a place.

Real Estate Institute of Queensland (REIQ) data shows Greater Brisbane’s vacancy rate was sitting at 1.4 per cent in September 2020, making it difficult for families to find adequate rental accommodation.

But it is believed the rental market has only gotten tighter since then and the vacancy rate has dropped further — something Cassie Windsor and her four children know all too well.

Ms Windsor said in the past five months, she had gone to countless rental inspections and put in dozens of applications, hoping she could find a house that was affordable and large enough for her family.

The family was lucky enough to get help from a not-for-profit body in the form of a three-bedroom house in Redbank Plains, south of Brisbane. However the short-term lease is due to finish in April.

“It is hard to fit two beds in each room and the kids are on top of each other all the time, so it doesn’t suit our needs at all, but finding a bigger house is as rare as hen’s teeth,” Ms Windsor said.

She said the family was even considering relocating back to Townsville in north Queensland, where they moved from five years ago.

“There are so many applicants to one house and it is very intimidating to go to these inspections where you see 30 or 40 applicants for one house,” she said.

“It is deflating. You start to think, ‘Why bother?’

“Applications are often getting approved before you even go into these houses, so it is very overwhelming.”

The biggest demand is for standalone houses, rather than units.(ABC News)

Ms Windsor said she had started writing cover letters for her applications, often including photos of her family and pets, as a way to get noticed by leasing agents and landlords.

“You are not hearing back from anyone, so you do not know what the issue is,” she said.

“Within a day or so that house is leased and you haven’t heard anything and you have to move on to the next one and it is tiring and stressful.”

Ms Windsor said she knew of other people who had resorted to couch surfing or living in caravans due to not being able to find a rental.

She said the future was looking uncertain for the family and the stress had started affecting her sleep.

“We don’t know where we are going to be in April,” she said.

“There is help out there, but there are just so many people who need it and they are stretched so far.”

Families offering above asking price

Agent Nicholas Kruger said it was becoming increasingly common for prospective tenants looking for rental properties in Greater Brisbane to offer above the asking price or offer to pre-pay several weeks, or even months, of rent in advance.

“In the last two weeks we have noticed a big difference in the number of enquiries coming through,” Mr Kruger said.

“We have seen that a lot of tenants are offering one to two months’ rent in advance and we have noticed some tenants offering an extra $5 or $10 to secure a property.”

A strong sales market is also reducing the amount of rental stock.(ABC News: Markus Mannheim)

Mr Kruger said it was not uncommon for 20 applicants to apply for a single home, with most applicants pre-applying before they even saw the property.

“The office is working around the clock — there just isn’t enough stock and people are trying to move quickly to avoid missing out,” he said.

Mr Kruger there are regularly as many as 20 applicants for a single property.(ABC News: Baz Ruddick)

REIQ chief executive officer Antonia Mercorella said rental markets in most parts of Queensland, including regional areas, were extremely competitive.

She said a combination of factors were making rental houses — rather than apartments and units — scarce, but the demand for them was greater.

“During the pandemic, the Palaszczuk Government introduced a whole host of measures keeping tenants in place for longer,” Ms Mercorella said.

“We have seen people moving back to Brisbane and interstate people moving into Queensland, so all of these factors have contributed.”

Biggest change in regional areas

Ms Mercorella said while there had been a “tightening” of the rental market in Greater Brisbane, which includes Ipswich, Springfield and the Moreton Bay region, the biggest changes to rental vacancy rates were being seen in regional areas.

For example, in Mackay in north Queensland in December 2016, the vacancy rate sat at 7.9 per cent, but it now sits at 0.6 per cent.

It is a similar story in Rockhampton in central Queensland, where vacancy rates sat at 8.6 per cent in March 2017, but now sit at 0.3 per cent.

She said many people were considering co-tenanting with friends and family so they could afford a more expensive property.

Samantha Wild, 21, had been looking for rental properties for her and her three-year-old son Ashton on and off for the past two years.

Samantha Wild, 21, currently shares a room with her three-year-old son because she cannot find a rental property.(ABC News: Steve Cavanaugh)

At the moment, the pair share a room and a bed at her parent’s home in Redbank Plains.

“I sometimes see between 20 and 50 people at the house inspections and I just think I have no chance,” she said.

“I guess they see someone with more money.”

She said she also attached cover letters to her applications in a bid to stand out, but she could not afford to offer more rent for properties.

Tenants Queensland calls for greater transparency

Tenants Queensland CEO Penny Carr said the organisation was hearing that landlords and agents were taking advantage of low vacancy rates and readvertising properties at higher prices than they were previously rented for.

“To what extent that is happening is hard to know, but people are certainly saying that is their experience,” Ms Carr said.

“People who are renting are more likely to tolerate unlawful or unreasonable behaviour because they are fearful of retaliatory action that will force them to leave and they will struggle to get back into the market at an appropriate price range or in an appropriate property.

“There is nothing to stop a prospective tenant to up-bid the price they are willing to pay for the property.

“What would be useful is more transparency in that process, so people know if they are competing with other people and if there are others offering a higher price, because that is often what they are told.”

Ms Carr said the State Government is expected to reform tenancy laws this year.(ABC News: Tim Swanston)

Ms Carr said this year the State Government was expected to introduce law reform when it came to tenancy.

“We think one of the proposals that should be taken up is that every eviction should have a just reason for it, that is set out in the law,” she said.

“At the moment you can be evicted for no reason and that provides the vehicle for people to have their tenancy ended and that property rented out at a significantly higher price.”