Toowoomba Rental Market Update
While major cities are suffering rising vacancy rates in inner suburbs, the opposite is true in Toowomba’s rental market right now.
We take a look at what’s really happening and why.
What is the rental market doing?
Toowoomba’s rental market is usually quite an active one – and for good reason. Renting offers flexibility, and people often choose to move for a change of scenery, closer to amenities that are now important to their household or better rental property.
But right now, the market is defined by renters staying put.
With COVID-19 bringing 2020 a great deal of economic uncertainty, tenants are choosing to stay where they are instead of moving on. Weighing against this is a general lack of stock.
In fact, rental stock levels are so low that, even though there are fewer people moving on, we have more rental applications than homes available for rent. This means there is strong competition for any properties that become available.
Almost 100% of the properties we do have available for rent have an approved application or are awaiting an owner’s approval on an application.
Low vacancy rates are the reality
In August, Toowoomba’s residential vacancy rate fell to 0.7%. According to data from SQM Research, this is the lowest vacancy rate in over a decade. The only time they were lower was in May 2010, when they were at 0.4%.
What’s more, this is not a sudden fall or a once-off – rental vacancies have been consistently low all year – reaching just 1.8% in April at their peak.
But what does this actually mean? The vacancy rate reflects the competition in the market or the equilibrium between supply and demand. A rate of 3% is typically considered “balanced” and fair for both renters and landlords.
When vacancy rates fall to the current lows of 0.7%, it reflects a high demand market. Tenants may struggle to find a property that suits their needs but landlords will be happy that their property is occupied or that there will be plenty of interest if it does become vacant.
What are rents doing?
As of September 2020, the median weekly rent for units in Toowoomba is $293 and for houses is $350. Despite some ups and downs, these figures are fairly consistent compared to 12 months ago.
At the start of the pandemic, COVID-19 emergency measures were introduced for tenants and landlords. As part of this, the Queensland government announced a range of changes in April to support residential tenancies where renters face financial hardship due to the COVID-19 pandemic.
These measures included a six-month freeze on evictions due to rent arrears for tenants experiencing financial distress (such as loss of income) because of the impacts of COVID-19. There was also a freeze on registering tenants experiencing financial hardship on a tenancy database, as well as a cap on break lease penalties and help with utility bills.
As we enter October, social distancing rules still apply for home inspections. However, the QLD Government has announced that the bulk of these measures are coming to an end.
As we progress into the next phase of the pandemic, tenants will still receive leniency if they are impacted financially by COVID-19. But the government has stated we are transitioning back towards normal residential tenancy arrangements, thanks to the strong position QLD is currently in.
Our advice for tenants
Right now in Toowoomba, many properties are renting before they even become available. This is not the kind of market where good rentals – or any rentals at all – last long.
So we strongly recommend that tenants do plenty of research and look for their next home at least a month before they need to move.
We also recommend tenants register their details with local real estate agents so they can find out about any listings in advance of them being advertised. At RE/MAX Success, we use database matching to connect prospective tenants with rental properties before an active marketing campaign is undertaken.
Our advice for landlords and investors
Despite COVID-19, this is a good time to be a landlord in Toowoomba. With low vacancy rates and a growing population, Toowoomba is popular with renters. It’s also a popular destination for those looking to escape a big city, and embrace life in an attractive regional area.
Take advantage of Toowoomba market conditions today
Looking to rent out your property or buy an investment property? Talk to the Toowoomba real estate experts and find out how we can help make your property dreams a reality.