There is a real rental crisis in Queensland, as we discussed in this article: The Greens Proposed Change to Rental Increases. Two weeks ago, there are Queenslanders living in tents and raising families in caravans. There is a real need for more affordable housing in Queensland and more broadly Australia. In the aforementioned article, we spoke about QLD Greens’ proposal to freeze rent increases for 2 years. This from The Greens QLD MP Amy MacMahon. While this did well to raise the issue it didn’t get at the heart of the problem which is the lack of supply.
Last week the QLD State Government announced that for the next 3 years people with properties that have a Granny flat would be allowed make them available to a tight rental market. This seems a better idea than previously suggested by The Greens. But here is my skepticism, how many are there? How many are there that people will want to let out? And of the ones that people are willing to let, how many are already doing so through Gumtree or Airbnb? And of what might be a very small number of available flats, they are only suitable for singles or couples. This does not go far to address the shortage of family homes for renters.
Let’s talk a little bit about some of the numbers. It is really unclear how many Granny flats there are in QLD and how many are available. So, we can’t talk much about, if at all this will help ease the market. But, just in terms of pure rental yield in Brisbane a 2 bed 1 bath Granny flat might fetch anywhere from $300-450/week depending on size and location, etc. On short-term rental platforms, the rates are between $200-400/day. There is a clear incentive to make spare capacity available to people but will the market elect to do nothing or go to the short or long-term rental market? Will there be a lot of people converting space into Granny flats so they can get in on the added income for a few years? All in all, a good step towards addressing supply as the main issue. But it will likely only help a relatively small number of people that are looking for housing for themselves and for couples.
