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October 31, 2023

What’s Behind Toowoomba’s Growing Rental Crisis?

We’ve written a lot recently about how Toowoomba’s sales market has been regional Australia’s best performer in recent years.

But one of the downsides of a hot property market is that, for many people, it can be really tough being a renter right now.

Over the past three years, the citywide median asking rent has risen an average of 11.5% to now stand at $451.20. This comes on the back of a vacancy rate that sits at 0.6% and has been at or below 1% since late 2020.

So, what’s behind today’s rental crisis? We explore.

Our region’s growing population (and popularity)

Toowoomba hasn’t just had one of Australia’s fastest-growing housing markets, it’s also had one of the fastest-growing populations and the two tend to go hand in hand. The Australian Bureau of Statistics reports that between the 2016 and 2021 Censuses, the population grew from 149,512 to 173,204 – a rise of 15.8%.

This means that over those five years, on average, 13 new people chose to call Toowoomba home every single day.

The population growth rate hasn’t slowed since the 2021 Census, either. In fact, estimates show it has sped up. Queensland took in 124,200 new arrivals in the year to March 2023. Toowoomba benefited from this, as well as internal migration from elsewhere in the state.

Most new arrivals tend to rent, at least until they settle in a new city. And the sheer rate of population growth has been putting pressure on the rental market.

Not enough homes for rent

At the same time as our population swells, too few new homes are coming to market to satisfy the demand. In fact, the number of listings across our city has been dwindling for some time.

After peaking at around 750 citywide rental vacancies in late 2016, the number of available rental properties has fallen to just around 100, according to SQM Research. That’s incredibly few when considering it represents just one free rental property for every 1,730 residents.

Low stock levels and high demand can only push rents one way – upwards.

Not enough homes are being built

Of course, the current pressure on rents could be alleviated by increasing the supply of homes. But that’s simply not happening. Too few new homes are being built in Toowoomba – and those that do get built tend to be owner/occupied rather than rented out.

One reason for this is that there is too little subdividable land. Another is that construction costs rose dramatically between 2020 and 2022, making many think twice about building.

But then again, even those who could afford a builder have often found it hard to secure one who can work within a realistic timeframe. Our city’s extensive infrastructure and government-funded construction projects mean there are plenty of well-paid construction jobs outside of the residential property market.

Jobs and infrastructure

Speaking of which, the strong rental market is, to some extent, a reflection of our booming local economy.

Most recently, the Toowoomba Development Status Report highlighted $18.8 billion of new investment in our area. Many contractors and employees who work on the projects have come from elsewhere to work in Toowoomba, and they’re choosing to rent locally.

Property prices in Brisbane and other major cities

Finally, it’s worth remembering that the local sales and rental markets don’t operate in a bubble. We’re influenced by what’s happening more broadly.

Both rents and property prices in Brisbane have increased massively since COVID struck in 2020. The city’s median house price lifted almost 42% in just two years.

That has encouraged many residents to look outside of the capital city. And, with our great transport links, education facilities and lifestyle, more and more people are choosing to move here.

Want more?

Get in touch with our experienced team today to find a property that suits your needs in Toowoomba.

Article by Katie Knight

Some may say real estate is in Katie’s blood having joined real estate following her father, Ian Knight, into the industry where he had pioneered the path of real estate in Toowoomba in the late ‘80s and opened the ninth regional RE/MAX office… View profile

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