Queensland’s rental market gridlock persists as vacancy rates remain low
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Photo by Gelgas Airlangga
Queensland’s rental market remains in a state of gridlock, according to the latest Residential Vacancy Rate Report from the Real Estate Institute of Queensland (REIQ) for the September Quarter of 2025. The report reveals that the statewide vacancy rate is still stuck at a low 1.0%, indicating tight conditions across much of the state. This is significantly below the REIQ’s healthy range of 2.6% to 3.5%, which is considered necessary for adequate housing mobility and population growth.
The report, which covers 50 local government areas (LGAs) and sub-regions across Queensland, indicates that almost half of these areas (23) have seen a tightening of vacancy rates, while 15 remained unchanged and 12 experienced some relaxation compared to the previous quarter. Despite these minor fluctuations, the overarching picture is one of a rental market at a standstill.
REIQ CEO Antonia Mercorella likens the situation to a traffic jam, with renters unable to move due to the scarcity of available properties. “Queensland’s rental market is like a traffic jam – many people are staying put because finding somewhere to move can be really difficult,” she said. This entrenched tightness has resulted in what Mercorella describes as “rental gridlock,” where tenants renew leases not out of choice, but necessity. “Longer tenancies, while sometimes seen as a positive indicator of a healthy market, can also reflect a lack of choice rather than stability,” she added.
The data from the Residential Tenancies Authority supports this view, showing an increase in the median length of tenancies for houses to 21.1 months in the fiscal year 2024/25, up from 20.8 months the previous year. Meanwhile, units held steady at 18.2 months, a slight decrease from 18.3 months. This trend suggests that tenants are staying put longer, possibly due to the difficulty of finding new accommodations.
Mercorella also highlighted the shifting sentiment among lessors, who are dealing with rising operating costs and legislative changes that have left them responsible for break lease bills. “In a tight market, we’re seeing higher instances of tenants who are accepting lease terms that they don’t intend to see through – continuing to look for a preferred property to rent or to buy,” she explained. This has led to greater frustration among property owners, who are increasingly intolerant of early break leases and the associated costs.
The report also underscores the uneven nature of the rental crisis across Queensland. While some areas, such as Cook (0.0%), Charters Towers (0.1%), and Goondiwindi (0.1%), report extremely low vacancy rates, other regions like Bay Islands (4.0%) and Isaac (5.5%) offer some relief. However, these “weak” markets are in the minority, with most major population centres, including Greater Brisbane (0.9%) and the Sunshine Coast SD (1.0%), falling well within the tight range.
Looking ahead, Mercorella expressed little optimism for improvement in the final quarter of the year. “We’re seeing fairly constant rental activity spread evenly throughout the year – the traditional seasonal peaks and troughs have flattened out,” she said. She emphasised the need for policy intervention to address the ongoing imbalance between supply and demand. “We need to be accelerating new builds, encouraging investment in the private rental sector, and supporting diverse housing models such as build-to-rent and smaller dwelling formats,” she stated.
The report’s findings highlight the urgent need for policy and planning settings that actively unlock supply and promote fair rental legislation to encourage investment. Without such measures, the rental gridlock is likely to persist, leaving renters with limited options and landlords with growing frustrations.
In terms of movements over the quarter, some areas like the Sunshine Coast sub-regions showed notable tightening, with Maroochy Coast (0.9%), Hinterland (0.8%), and Noosa (1.9%) all contracting by 0.5 percentage points. Meanwhile, Gladstone saw a more substantial easing, with a 0.4 percentage point increase in vacancy rates, suggesting a slight softening in demand.
Overall, the REIQ’s September Quarter 2025 report paints a picture of a Queensland rental market under pressure, with tight conditions persisting across much of the state. As stakeholders grapple with the challenges of low vacancy rates, the call for strategic intervention and investment in housing supply becomes ever more urgent.