Queensland housing market in free-fall as question of legacy arises

The rental market in Queensland is in crisis, just a decade out from one of the world’s largest sporting events.

As the 2032 Olympics creep closer — and as the Queensland state government asks for feedback on what their legacy should be — there is a sense of urgency amongst Queensland’s housing advocacy organisations.

The sector is calling for urgent action to help address the shortfall of housing stock, especially for renters and those on lower incomes or experiencing homelessness.

The latest Rental Affordability Index, published late last year, revealed that Greater Brisbane’s rental market experienced the sharpest decline in affordability of all capital cities in Australia with its index score falling by 11 per cent.

See more: Urgent action need on rents as pressure grows on sector

Wider Queensland hasn’t been spared. The report revealed that regional areas of Queensland are now at their most unaffordable since the index began.

And there’s a severe shortage of vacant rentals; Real Estate Institute of Queensland (REIQ) rental vacancy data shows September 2022 was the ninth consecutive quarter with vacancy rates below one per cent.

Penny Carr, CEO of Tenants Queensland, said she has been hearing “pretty horrendous stories” from the sunshine state’s renters — things like rent increases of 35 per cent.

In Queensland, rents can be increased every six months, compared to 12 months in other jurisdictions around the country.

Large rent increases were forcing people to “make very difficult decisions”, she told Pro Bono News.

“It really puts people in this incredibly dire situation, because they are having to make very difficult decisions about whether to sign a new agreement with a significant rent increase or take their chances in a very hot market,” she explained.

And for some tenants, there really is nowhere to go; Carr said she knew of people living in cars and tents, unable to find a new rental. Many of these were families with small children, whose parents were working full time hours but still unable to find a proper roof under which to sleep.

Carr also related the story of an elderly lady, unable to make the increase in her rent, who had begun “selling off possessions in readiness to go to — she doesn’t know where to”.

How did we get here — and how do we get out?

Carr said it was difficult to understand how the rental market had gotten so bad.

She said “investors with collateral” had pushed many buyers out of the market.

Areas that were traditionally regarded as “low cost” have seen an influx of both seachangers, and people moving back to cheaper places.

Moving further away compounds the issues that renters face, as they have less access to services, transport and employment opportunities.

And, Carr noted, with rents increasing in regional areas too, moving may not resolve the affordability problem.

But she said there’s “no quick fix” or single answer to the question of how to address rental affordability.

“It’s got to be multiple strategies. We do need to have a look at the current stock, even privately-owned stock,” she said.

“We’ve got to disincentivize people using stock for short term holidays, like on those platforms like Airbnb, and disincentivize people from leaving their properties [empty].”

Affordable housing stock also needs to be increased, and tenancy laws need to be updated to protect renters from things like “opportunistic rent increases”, or no-ground evictions, she added.

“And I think that it’s really time that Australia looks at limiting rent increases,” Carr said.

“If we’re going to rely on the private rental market to house people, we need to regulate it so it works for people, not not just the market, because there is an opportunity and it is going to get harder with the Olympics coming in ten years’ time.”

Leaving a legacy

Action on the rental crisis in Queensland is made all the more urgent by the proximity of the games.

Momentum is building around what sort of legacy the Brisbane Olympics could leave on Queensland’s social sector.

Last year Q Shelter released its ‘Go for Gold: A social inclusion legacy for the 2032 Olympic & Paralympic Games’ report, making a number of recommendations including:

• Developing clear social and affordable housing targets in key locations, including targets for the conversion of athletes’ village accommodation to social and affordable housing
• Developing measures to assist people to exit homelessness before Brisbane 2032 and prevent more people from becoming homeless
• Creating a lead agency for whole-of-housing system responses in Queensland with responsibility for coordinating all contributions across the levels of Government
• Monitoring and responding to housing market changes leading up to, during and after Brisbane 2032, in impacted regions
• Reporting on progress against housing targets to achieve real-time improvements
• Establishing a housing trust to capture community-wide contributions to social and affordable housing in perpetuity.

Jackson Hills, manager of policy and strategic engagement at Q Shelter, told Pro Bono News that Queensland’s rental market had hit a “crunch period”, thanks to internal migration, the return of international students, and the proliferation of short-term rentals.

Q Shelter has pushed the state government to review the short stay rental market, and has seen local councils begin work to determine how much stock is available.

It’s important to get this tally in place before the influx of people expected for the Olympics, he said.

“We want a healthy housing system overall. We don’t take the view at Q Shelter that there shouldn’t be short-stay accommodation… all we’re saying is we need to understand how much of it there is and what’s the right balance to get a healthy housing system.”

At the same time, he added, there is a need to clarify how much social housing Queensland needs, and for whom it will be designed. 

“We don’t have any data around that. We should be able to by now have a predictive model that tells us what that need would be and then we can map our supply measures against that,” Hills said.

This was flagged by many advocates at the Queensland Housing Summit last year, he said.

After the summit, Queensland premier Annastacia Palaszczuk announced the expansion of the remit of Economic Development Queensland (EDQ) to include social and affordable housing, with the aim of speeding up planning approvals in new priority developments and new growth areas, a decision that was welcomed by Q Shelter.

But there is still more to be done, with Q Shelter urging work to prevent the Olympics from  displacing people on lower incomes. Q Shelter also wants to see the construction of more affordable housing and supporting housing for those experiencing homelessness.

As far as the rental market goes, Hills said it is necessary “to go right back to the start of the story”.

“In Australia, I think particularly in Queensland, we need to get to a point where we have longer term rental security and some of that comes in products like build-to-rent, where you get one sort of owner of a scheme of rental products and you might have a ten-year rental agreement where you’ve got much more security of tenure, and this is a lot more common in other parts of the world,” he explained.

Large build-to-rent schemes could help address the supply issue, he said, and can unlock new forms of capital from superannuation funds and long-term institutional investors.

“If we can get that capital coming in to help solve this problem, in addition to the monies that the governments have committed to recently, we could really start to see an uptick in supply,” Hills said.