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Brisbane's unit squeeze

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  • Brisbane's unit squeeze

    Brisbane's unit squeeze

    Author: Christine Kellett
    Date: August 20, 2009
    Publication: Sydney Morning Herald (subscribe)
    Renters are paying 30 per cent more for the same accommodation than they were three years ago, with the looming end to the first home buyer grant only set to increase demand.
    June quarter figures show the average weekly rent for a unit in Brisbane rose by 1.6 per cent to $347, up from $342 a week in March.
    The cost of renting a home, however, fell by more than $10 a week to $401 on average, with pundits crediting the $14,000 first home buyer grant and low interest rates for a drop in house rental demand.
    But that looks set to change come October, when the winding back of the government grant makes buying a home less attractive for those keen to get a foothold.
    RPData senior researcher Tim Lawless said vacancy rates were likely to contract, forcing up prices.
    "Renters have had some relief for a little while now because first home buyers have used (the grant) to get out of the rental market.
    "This year especially we've seen an increase in the number of suburbs where it is actually cheaper to buy than rent. Housing affordability has been back to levels not seen since 2002.
    "But the grant is being wound back in October and that is going to have an impact."
    Rental costs have been rising an average of 10 per cent a year in Brisbane. RPData figures show a 30 per cent jump in rental costs in the Brisbane housing market since 2006 and a 36 per cent rise in the unit sector.
    "This quarter, Brisbane was one of the only cities in Australia where unit rents have actually gone up," he said.
    "There tends to be greater demand for units here because they are cheaper and closer to the city and public transport corridoors. Vacancy rates in Brisbane are incredibly low and that obviously drives price."
    Mr Lawless said the news was better for investors, with rental yeilds steady at 4.6 per cent for houses and 5.4 per cent for units.
    "Brisbane unit market is more affordable than any other mainland capital. It's actually cheaper to buy a unit here than it is in South Australia."
    The median unit price for the June qaurter in Brisbane is $337,000, compared to $345,000 in Adelaide.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx