RE/MAX Success principal Ian Knight said an increase in the number of properties listed for rent was driving the softening.
TOOWOOMBA’S rental property market has softened in recent months in response to a subdued real estate sales market.
RE/MAX Success principal Ian Knight said an increase in the number of properties listed for rent was driving the softening.
“Our vacancy rate is at 1.2 per cent today (Wednesday),” Mr Knight said.
“Because sales activity is subdues and owners can’t get what they perceive as acceptable prices for their homes they are placing them in the rental pool.
“It means tenants have a greater selection than earlier in the year.”
LJ Hooker Toowoomba principal Mike Stewart said the Toowoomba rental market is proving to be resilient in the face of generally subdued activity.
He said he had noticed an increase in supply over the last quarter, but this has only resulted in a change in the vacancy rate from about 1% to 2%.
“In relative terms this is a 50% increase in supply but represents less than seven days vacancy for the average Toowoomba property over a year,” Mr Stewart said.
“As a result we see this slight upward movement in the vacancy rate as transitional in nature as opposed to a growing trend because the fundamentals have not changed.”
Figures released by RP Data this week show rental rates have increased by 2.9% over the past year but have remained flat across the combined capital cities during the second quarter of 2011.
The release said for houses, many regions outside the capital cities have recorded limited growth in rental rates highlighting the lack of rental market pressures in many of these non capital markets.
It went on to say regional unit markets have recorded even weaker conditions over the quarter with the majority of regions highlighted recording either flat conditions of falls in advertised rental prices.
Mr Knight said he had seen some growth in rental rates, but these were in response to increases in rates, compliance charges and insurance.
Mr Stewart said he had begun to see investors returning to the market in search of bargains in the sub $300,000 market.
“This is being driven by a perceived reduction in competition in the market segment from first homebuyers as changes in the stamp duty rules and the new build bonus drives them towards the new home market,” he said.