City exodus driving Brisbane rents up

Published: 17 January 2008.

By Georgia Waters for Brisbane Times

Frightened from inner-city apartments by high prices, renters started a self-imposed exodus to the outer suburbs, where they found they could often afford a three-bedroom house for the price of a one-bedroom flat in New Farm.

But the plan backfired, with the new hunger for rental properties in the suburbs leading to a shortage of availability - and an inevitable increase in prices.

Over the past year, the weekly median rent for a two bedroom house in the middle suburbs of Brisbane (5km-20km from the CBD) has increased by more than 14 per cent, while median rents for a similar unit in the inner city increased by less than six per cent.

And it won't stop there.

Today, the Real Estate Insitute of Australia warned that rents were likely to continue climbing during 2008.

Real Estate Institue of Queensland (REIQ) managing director Dan Molloy said vacancy rates in Brisbane remained low.

"With more and more people coming to the Sunshine State every week, there is simply not enough property to accommodate everyone," he said.

Brisbane residents had contined to be squeezed by rent prices - partly due to rising interest rates - and had been forced to look to the outer suburbs to find more reasonably priced rental properties, he said.

"The low vacancy rates of houses, units and townhouses in Brisbane's outer suburbs show that demand for homes close to the city has pushed rents out of reach for many people, who are now forced to look further afield for more affordable rental properties," he said.

Mr Molloy said one of the key drivers of higher rents was demand, and said Queensland's population and resources boom, two of the biggest factors putting pressure on housing demand, were not likely to slow in the near future.

He said the five interest rate rises since May 2006 had also had an impact on rent prices.

What it'll cost you to live in:

The inner suburbs (up to 5km from CBD): One bedroom unit: $265 a week, up 10.4% (over the past year) Two bedroom unit: $370 a week, up 5.7% Three bedroom house: $380 a week, up 11.8%

The middle suburbs (5-20km from CBD) One bedroom unit: $195 a week, up 14.7% Two bedroom unit: $275 a week, up 12.2% Three bedroom house: $320 a week, up 14.3%

The outer suburbs (20km+ from CBD) One bedroom unit: $165 a week, up 13.8% Two bedroom unit: $210 a week, up 13.5% Three bedroom house: $270 a week, up 14.9%

Source: REIQ figures for median weekly rents in the September 2007 quarter