Housing supply

Townsville vacancies at 10-year low as rental prices soar and housing supply dwindles

In the regional city of Townsville, a two-bedroom unit in the CBD could cost renters up to $570 per week.

It puts the North Queensland capital well ahead of its glamorous competition.

In Melbourne’s inner-city suburbs, a two-bedroom unit costs an average of $410 a week, according to data from the Real Estate Institute of Victoria.

According to the Residential Tenancies Authority of Queensland, median rents in Townsville have jumped more than 30% over the past three years.

The price for a two-bedroom unit was just $265 per week in the December 2018 quarter. Last December, it rose to $350 per week.

The view of Townsville and its CBD from Castle Hill(ABC North Queensland: Zilla Gordon)

Townsville real estate agent Santo Spanella said he has seen prices rise sharply in the area.

And he said there were simply too many people looking and too few properties to go around.

“We see 10 to 15 requests per property,” Mr. Spanella said.

Location, location, location

Mr. Spanella said location was a big factor in rental prices.

While interstate migration triggered by COVID-19 had driven prices up in Queensland, it has driven them down in Melbourne.

“Generally, places closer to the beach or conveniently located might fetch a bit more money.”

The competition was ripe for families with school-aged children.

“Families want to be in certain watersheds so they can enroll their children in different schools that might be more suitable for their children,” he said.

Open for lease sign on footpath outside a property in Canberra.
Estate agents say it’s normal to see 30 inquiries for a single property.(ABC News: Alexandra Beech)

Queensland Real Estate Institute zonal chairman Ben Kingsberry said that after a fairly subdued decade, Townsville’s property market was rebounding.

An increase in the number of interstate buyers and first-time buyers acquiring properties boosted market prices.

While one-bedroom units in the Townsville CBD cost up to $400 per week in the last quarter, in 2018 the median weekly rent for one-bedroom apartments was $230, according to data from the Residential Tenancy Authority of Queensland.

“[Because of this]we now have a lot of first-time home buyers coming into the market and a lot of people buying homes coming out of that rental market, which is decreasing the supply,” he said.

Close up of house under construction, frame and windows, no walls, no plan workers.
Real estate agents are calling for more new construction in the area.(ABC News: John Gunn)

Townsville’s vacancy rate is currently at 0.7%, and while it’s up from 0.6% in September of last year, it’s about the lowest in more than 10 year.

Mr Kingsberry said the area’s current position meant it needed more homes.

“But we’re still in the situation in Townsville where the cost of building a new home and making it an investment is very, very high compared to buying an established property and installing it. tenants,” he said.

No short term solution

Mr Kingsberry said there was no quick fix to the region’s supply problem.

A new subdivision stretches as far as the eye can see.
Some real estate agents think people are put off by the costs of owning a home.(ABC News: John Gunn)

“Most of the supply is dependent on these mom and dad investors going out and creating more homes,” he said.

Three-bedroom homes were the most in demand, with Mr Kingsberry saying it was common to receive 20-30 inquiries per property.

He wanted to see more incentives for Queensland landlords.

He also said he thought high stamp duties and early homeowner subsidies were incentives to consider creating more housing.

“Anything we can do to encourage more investors into the market will make a big difference,” Mr Kingsberry said.