Cost of living drives co-tenancy boom in Queensland as rental pressures persist

In the face of escalating living costs, many Queenslanders are finding that living alone is increasingly becoming a luxury they can no longer afford. As rental pressures intensify across the state, a growing number of tenants are forming co-tenancy arrangements to manage expenses more effectively.

The Real Estate Institute of Queensland (REIQ) recently released its Residential Vacancy Rate Report for the March Quarter of 2026, revealing a statewide vacancy rate of just 0.9 per cent. This figure marks a slight decrease from 1.0 per cent in the previous three quarters, highlighting the ongoing challenges faced by renters. The REIQ considers a ‘healthy’ vacancy rate to be between 2.6 and 3.5 per cent. However, the current rates are far below this threshold in 33 of the 50 local government areas (LGAs) and sub-regions monitored by the institute.

Compared to the last quarter of 2025, nearly half of the regions surveyed (24) saw further tightening in vacancy rates, while 13 remained unchanged and another 13 experienced some relaxation. Regional and rural areas, particularly those with agricultural bases such as Goondiwindi (0.1%), Charters Towers (0.1%), and Maranoa (0.2%), continue to bear the brunt of rental pressures. Cook’s vacancy rate remains at zero, rendering it virtually inaccessible for prospective tenants.

In southeast Queensland, rental markets remain firmly in tight territory. Notable figures include Greater Brisbane at 0.8 per cent, Brisbane LGA at 1.0 per cent, and both the Scenic Rim and Toowoomba at 1.0 per cent. The Gold Coast and Sunshine Coast are also experiencing tight conditions with vacancy rates of 1.1 per cent and 0.7 per cent, respectively.

Despite the overall tight conditions, some coastal and regional markets have seen modest increases in vacancy rates this quarter. The Maroochy Coast and Hinterland both recorded a rise of 0.5 percentage points, while Hervey Bay saw an increase of 0.4 percentage points and Noosa by 0.3 percentage points, suggesting a slight, potentially seasonal, increase in rental availability.

Conversely, resource-driven markets and the Bay Islands have experienced significant tightening. Isaac’s vacancy rate dropped by 0.6 percentage points, while the Bay Islands saw a decrease of 0.5 percentage points. Gladstone and Mount Isa both recorded a 0.4 percentage point decline, reflecting the sensitivity of these regions to economic and workforce shifts.

Despite these movements, only a handful of regions are within or above the REIQ’s ‘healthy’ range. Gladstone, with a vacancy rate of 2.2 per cent, is teetering on balance due to an influx of investors. The Bay Islands, at 3.5 per cent, and Isaac, at 5.5 per cent, remain the state’s only ‘weak’ rental markets.

REIQ CEO Antonia Mercorella highlighted how cost-of-living pressures and persistently low vacancy rates are reshaping rental behaviours in Queensland. “We are seeing a clear shift in rental behaviour, with more tenants forming co-tenancies—joining forces to share costs and expand their options,” Ms Mercorella said.

Pooling resources can allow tenants to access higher-quality properties or better-located homes that might otherwise be out of reach for individuals renting alone. This trend is particularly evident in southeast Queensland, where it is not uncommon to see four or more tenants sharing premium properties, making higher rents more manageable on a per-person basis.

Additionally, the ongoing development of major projects on the Gold and Sunshine Coasts has led to some workers opting for ‘drive-in, drive-out’ arrangements. Due to rising fuel costs, tradespeople are renting in groups near their worksites during the week to avoid daily commutes. Multi-generational living arrangements are also emerging, with extended families renting larger homes together to manage costs.

While co-tenancy offers a practical response to affordability pressures, Ms Mercorella cautioned that it is not a long-term solution to Queensland’s rental housing shortfall. “To ease pressure sustainably, we need to address the underlying issue of housing supply and create more pathways for renters to transition into home ownership where possible,” she said.

Ms Mercorella also emphasised that vacancy rates do not tell the whole story. Real estate professionals report that time on market is stretching out for some rental listings, with a growing mismatch between lessor and tenant expectations. “While lower-priced properties continue to attract strong competition, higher-priced listings are taking longer to lease—particularly as discretionary spending is drying up,” she noted.

Feedback from REIQ members indicates that some property owners are setting rent expectations based on headlines rather than the quality and attributes of their property, leading to longer vacancy periods and fewer suitable applicants. Traditional rental patterns have been disrupted, with fewer predictable leasing cycles, increasing workloads for property managers, adding costs for owners, and reducing tenant tenure length.

The industry is also seeing a rise in disputes, with many property managers reporting unprecedented levels of activity through the Queensland Civil and Administrative Tribunal (QCAT). There is a strong call from the sector for a more balanced legislative framework to support both tenants and property owners.

As Queensland grapples with these challenges, the need for effective solutions to address housing supply and affordability remains critical.