Queensland’s rental market under pressure as vacancy rates remain critically low
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Photo by M G
Queensland’s rental market continues to face significant challenges as vacancy rates remain at a critical low, with the statewide vacancy rate recorded at just 1.0% for the December Quarter of 2025. This concerning figure was highlighted in the latest Residential Vacancy Rate Report by the Real Estate Institute of Queensland (REIQ).
The REIQ considers a ‘healthy’ vacancy rate to be between 2.6% and 3.5%. However, this quarter, 33 of the 50 local government areas (LGAs) and sub-regions tracked by the REIQ across Queensland reported vacancy rates at or below 1.0%. This indicates a severe strain on the rental market, with only a modest increase in available rental properties failing to meet the high demand.
REIQ CEO Antonia Mercorella described the situation as unsurprising, given the persistent tight conditions in the rental market over the past year. “We all need a roof over our heads whether we rent it or own it,” Ms Mercorella stated. “However, Queenslandâs rental population is higher than the national average at 36 per cent, highlighting the stateâs heavy reliance on rental properties to house Queenslanders.”
Ms Mercorella further elaborated on the challenges faced by renters in the state. “These persistently low vacancy rates being experienced in many parts of the state show there is significant strain on our rental housing stock. Itâs like a game of âmusical chairsâ – when rental supply falls short, itâs the most vulnerable people in our community who are left standing. This is evident in our stateâs social housing waitlist, which has reached almost 59,000 Queenslanders.”
The report also highlighted the difficulties faced by young Queenslanders aspiring to transition from renting to homeownership. “We also know there are renters who want to transition into home ownership but may need a leg up onto the ladder. Itâs young Queenslanders in the 25-39-year-old age bracket who have seen the largest declines in home ownership rates,” Ms Mercorella explained.
In response to these challenges, the REIQ has welcomed government initiatives aimed at easing the financial barriers for first-time home buyers. “The REIQ welcomes Government initiatives such as shared-equity schemes to help close the deposit gap and first home buyer stamp duty relief that address these major upfront financial obstacles standing in their way,” Ms Mercorella noted.
To alleviate the pressure on the rental market, Ms Mercorella emphasised the need for a “reset” in the approach to housing. “Itâs time for a reset to help ease Queenslandâs rental market pressures. By helping more first home buyers transition from renting to owning a home, it lightens the load on the rental market by alleviating some of the demand-side pressure,” she stated.
The REIQ has also advocated for ambitious goals to increase homeownership levels in Queensland. Ms Mercorella highlighted the Crisafulli Governmentâs plan to boost the state’s homeownership rate, currently the lowest in Australia at 64%, to the highest in the country within a decade.
Furthermore, the REIQ has called for increased construction efforts to meet the state’s housing needs. “To cater to Queenslandâs portion of nationally agreed construction targets, we need to be building around 49,000 new dwellings each year, but with 34,000 built over the 12 months to September last year, weâre falling behind,” Ms Mercorella said.
The report identified the tightest rental markets as Cook, with a vacancy rate of 0.0%, and Charters Towers at 0.1%. Other areas with critically low vacancies include Banana and Goondiwindi, both at 0.3%, and Maranoa at 0.4%.
In contrast, only a few regions offered renters more options. Mount Isa, with a vacancy rate of 2.3%, and Gladstone at 2.6% were among the few areas approaching a ‘healthy’ range, while the Bay Islands and Isaac were classified as ‘weak’ rental markets with vacancy rates of 4.0% and 6.1%, respectively.
Despite the modest easing of vacancy rates in some areas, the overall situation remains challenging. Greater Brisbane, Brisbane LGA, Ipswich, Logan, Moreton Bay, and Redland all reported vacancy rates around 1.0%, indicating ongoing pressure in these regions.
The REIQ has expressed support for the ‘construction industry reset’ mindset and productivity measures outlined in the State Governmentâs response to the Queensland Productivity Commission report. “Speeding up new housing supply is critical because the reality is there is a lot of catching up to do and there are still strong headwinds coming,” Ms Mercorella remarked.
Overall, Queensland’s rental market remains under significant pressure, with a critical need for increased housing supply and support for first-time homebuyers to alleviate the ongoing strain on renters across the state.