The rental market in Cairns has been described as ‘critically undersupplied’ as its vacancy rate remains at a record low.
The latest data from the Real Estate Institute of Queensland (REIQ) shows a 1.2% vacancy rate in February, with a total of 171 properties available to rent.
The vacancy rate has continued to drop since March last year.
While the current vacancy rate isn’t as low as some other Queensland regions – 0.5% in the Sunshine Coast and 0.9% in Ipswich for example – the REIQ has classified the Cairns rental market as ‘critically undersupplied’.
The data shows that some of the available listings are prestige properties with high weekly rents, while others are in poor condition or inferior locations.
Impact of the pandemic
Alby Bunting, Cairns-based Senior Advice Worker at Tenants Queensland Inc., said it’s been increasingly harder to find suitable rental properties since March.
“Since the beginning of the pandemic Cairns has seen an increasing tenancy crisis with many finding it harder and harder to find accommodation that is both sustainable and affordable,” Alby said.
“Cairns in particular has seen positive market sales – with many buyers relocating from Southern states to our sunny region.
“Along with many owners returning from overseas and taking back possession of previous investment properties it ultimately removes rental properties off the market and forces tenants into an already struggling market.
“Tenants have advised that their previous rental agreements ended due to either sale of the premises, owners taking back possession, increasing rents, and/or terminations for rent arrears from COVID-related financial impacts.”
‘Risk of primary homelessness’
Mr Bunting said some available rental properties have seen up to 70 applicants.
“Many tenants have advised that they were forced to either provide a higher amount of rent per week on application or offer months of rent in advance just to be considered for an available rental property,’ he said.
“Those marginalised tenants simply cannot find affordable housing options in our region – specifically those on Newstart payments have advised that there’s almost zero rental properties that allow the tenant to sustain their ongoing rental payments as well as living costs.
“This forces those in the most need to live in unacceptable, overcrowded or risky living situations and increases the risk of primary homelessness.”
Unprecedented low vacancy rate
Tom Quaid, the REIQ’s Far North Queensland representative, said he has never seen a lower vacancy rate in Cairns.
“Anything under 2.5% is considered tight so we are at the point where there is very little choice in the market,” he said.
“I’ve spoken to a few people where they have a job starting and have not been successful finding a rental."
“There was a Sunshine Coast couple that came in November originally and they went home with their tail between legs because they just couldn’t find anything.
“Those who are persisting are having to go into short term accommodation – hotels, Airbnb, that sort of thing – which of course has got a fair cost attached to it.
“Those with pets or a non-stellar rental history are finding it particularly difficult.”
Increase in rent prices
Mr Quaid said the shortage is also leading to an increase in rent prices.
“Rental prices have gone up a bit – not dramatically but if leases are coming up for renewal landlords are increasing the price by 10 to 25 dollars without any opposition,” he said.
REIQ data shows the median weekly rent for a two-bedroom unit in Cairns has increased from the last quarter to be $350 per week.
The median weekly rent for a three-bedroom house is sitting at $440 per week.
Hope on the horizon
Mr Quaid predicts the shortages will slightly ease as hundreds of new dwellings are built off the back of government building stimulus.
“We would hope that will provide some assistance because it’s all for owner-occupied so they’re going to be moving into those homes as they’re completed and then their existing property will be available for rent or sale,” Mr Quaid said.
“It will add a few hundred homes added to the supply.”
Cairns Regional Council reported 602 new dwellings approved to date (March 10) this financial year – an 86% increase for the same period last year.
94 new single dwellings were approved in February, which is more than double the approvals in the same period last year.
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