Qld rental applications still high despite market gridlock

Rental applications in Queensland remain high despite a gridlock in vacancies across most of the state.

The Real Estate Institute of Queensland (REIQ) quarterly figures for September shows the state rental vacancy rate remains at 1% (classified as tight by the institute) in 38 of the 50 local government areas (LGAs) in the state.

It says almost half (23) of all the LGAs reported tightening vacancies while 15 were unchanged and 12 eased compared to the previous quarterly figures.

REIQ chief executive officer Antonia Mercorella says the overall picture of vacancy rates is of gridlock where very low vacancies are freezing mobility for renters.

“Queensland’s rental market is like a traffic jam – many people are staying put because finding somewhere to move can be really difficult,” she says.

“Even though the statewide vacancy rate hasn’t worsened, this entrenched tightness created a kind of rental gridlock where people are renewing; not necessarily because they want to but because they don’t want to risk competing for somewhere new.

“Longer tenancies, while sometimes seen as a positive indicator of a healthy market, can also reflect a lack of choice rather than stability,” she says.

“When tenants sign a lease or renew out of necessity instead of preference, it’s a sign that scarcity is seizing up the market and contributing to inefficiencies.

“Property managers are still seeing high levels of rental applications for properties though many are ‘backup’ options, with applicants’ often applying for several properties at once in hopes of securing one but are not always proceeding when successful.”

The REIQ says Residential Tenancies Authority (RTA) data shows the median tenancy length for houses rose from 20.8 to 21.1 months in 2024-25 while units held at 18.2 months (from 18.3 months).

Mercorella says lessor sentiment is also shifting as operating costs rise and legislative shifts leave them picking up the bill as more tenants break lease due to these new laws.

“In a tight market, we’re seeing higher instances of tenants who accept lease terms that they don’t intend to see through, continuing to look for a preferred property to rent or to buy,” she says.

“Many owners are showing greater frustration over successive early break leases and have a reduced tolerance and financial capacity to absorb vacancy periods and foot the bill for new advertising and letting costs, with limited rent compensation.”

Mercorella says while Queensland is in the midst of a rental crisis, not every market in the state is experiencing these same conditions.

“Higher price-point properties, lower quality stock, or niche segments may see listings remain for longer, as demand can be more price-sensitive or selective,” she said.

“Additionally, properties that are not priced in line with the market are struggling to find tenants.”

Mackay’s rental vacancy rate stands at a tight 0.9%. Photo: ANDREW KACIMAIWAI. — Mackay’s rental vacancy rate for the latest quarter stands at a tight 0.9%. Photo: ANDREW KACIMAIWAI.

WHAT’S NEXT FOR RENTALS?

Mercorella says conditions were unlikely to improve in the final quarter of the year.

“We’re seeing fairly constant rental activity spread evenly throughout the year – the traditional seasonal peaks and troughs have flattened out,” she says.

She says there is a continual shortfall in supply amid growing demand with the state unable to deliver the numbers or mix of dwellings that is needed.

“We need to be accelerating new builds, encouraging investment in the private rental sector, and supporting diverse housing models such as build-to-rent and smaller dwelling formats,” she says.

“Without policy and planning settings that unlock supply, and rental legislation that encourages investors, this gridlock will persist.”