Granny Flats, Low Vacancies And Brisbane Rent Skyrocketing - What's Been Happening?!

So, if you happen to reside in Brisbane, perhaps you're an avid property investor with your finger on the pulse or even just a casual consumer of the news, undoubtedly

you would have become acutely aware of the dire housing shortage we're currently facing in the sunshine state. With an ever growing population and the highest interstate migration of any state over the last two years, it seems every refresh of our vacancy data brings with it another dip!

An article published by Eliza Owen for Corelogic in September 2022 provides a stark outlook on the current demands placed on the Brisbane rental market where another record year of internal migration has placed an excessive strain on the demand for available rental properties. Now, for scope the REIQ (Real Estate Institute of Queensland) defines a healthy rental market as one that balances a vacancy rate somewhere between 2.5 - 3.6%.. So with a present vacancy rate well below an average of 1% across the city we sit in a position of chronic undersupply and bluntly quite a tricky predicament.

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Brisbane Vacancy Rates - SQM Research: 2005 - Present

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Now of course for those of you who study the property cycle closely, there is a very clear understanding of what is to follow such an influx. Inflating demand and a dwindling supply? All of that pressure makes for a highly competitive environment and it's only a matter of time before we see an escalation take place in the amounts being asked for in rent. From March 2020 to present, we have seen a whopping 23% rise in rental figures, exacerbating the pain threshold for many renters, especially in the low income sector.

Beyond migration fueled dwindling stock supplies, investigative work conducted by the team at Matusik Property Insights has illuminated further disparity in the supply and demand model for those Australian households in need of multigenerational living standards.

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Brisbane Weekly Rents - SQM Research: 2005 - Present

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Per Matusik, at present one in five of Australia’s households hold two generations and some ten percent hold three generations. These figures are expected to rise to around 25% and 15%, respectively, within the next decade. Conversely though, less than 5% of Australia's housing stock caters to this demographic - yet another complexity to the rising demand for suitable and affordable housing.

As an immediate mechanism to curb these housing conditions, the QLD government has taken action - as of September 26, 2022 removing the usage restrictions previously applied to secondary dwellings and opening up the ability for homeowners to rent out granny flats to anyone.

In a press release made by the Queensland Government it was referenced that the hope for these changes would be to pave the way for increased and more accessible housing options for Queenslanders.

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Changes To Secondary Dwellings Usage!

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So what are the key changes that I need to know about?

Usage:

Prior to September 26, many council areas in Brisbane had very specific usage restrictions applied to secondary dwellings. In short - although you could potentially build a secondary dwelling in many council areas, outside of Logan City and Ipswich City this dwelling had to be occupied either by family members OR under the same lease agreement as the main dwelling. Moving forward, all secondary dwellings in Queensland will be able to be rented out separately from the main home.

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Are Councils Charging Contribution Fees?

Under the secondary dwelling code, the majority of councils do not levy an infrastructure fee to construct a secondary dwelling. Though this will certainly vary on a council by council basis.

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Are There Restrictions On Size?

Yes! In order to maintain compliancy you still have to adhere to the council specific requirements for a secondary dwelling. These requirements differ from council to council and will relate to items such as: floor plan size, parking requirements, frontage/lot size, site coverage etc.

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How Long Are These Changes Being Made For?

For the time being the Queensland Government has indicated that they will review these changes in 3 years to measure impacts. If they deem the impacts to be negative it is possible they may change the rules back. Conversely if they have been seen to be positive they may become permanent.

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What Happens If The Rules Change Back?

Fortunately in this instance there is protection afforded under Queensland planning law and you would be permitted to continue renting your secondary dwelling separately if:

• All requirements relating to the council's design standards for a secondary dwelling had been met at the time of construction
• You have obtained formal building approval for the secondary dwelling; and
• You started leasing the secondary dwelling separately before the rules changed

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