Rate significantly below benchmark for balanced market
Queensland’s rental sector continues to face significant constraints, with a recent report indicating no change in the statewide vacancy rate, which remains at 1%.
The Real Estate Institute of Queensland’s (REIQ) September Quarter 2025 Residential Vacancy Rate Report, covering 50 local government areas and sub-regions, shows that 38 regions recorded vacancy rates at or below 1%. This figure remains well beneath the REIQ’s benchmark for a balanced market, set between 2.6% and 3.5%.
According to the data, 23 regions saw tighter conditions, 15 remained unchanged, and 12 experienced some easing compared to the previous quarter.
'Traffic jam' of a rental market
REIQ chief executive Antonia Mercorella (pictured top) described the situation as one of ongoing immobility, with limited rental options for tenants. “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.
“Even though the statewide vacancy rate hasn’t worsened, this entrenched tightness has created a kind of rental gridlock, where people are renewing, not necessarily because they want to, but because they don’t want to risk competing for somewhere new. Longer tenancies, while sometimes seen as a positive indicator of a healthy market, can also reflect a lack of choice rather than stability.
Mercorella explained that when tenants sign a lease or renew out of necessity instead of preference, "it’s a sign that scarcity is seizing up the market and contributing to inefficiencies".
She continued: "Property managers are still seeing high levels of rental applications for properties – though many are ‘backup’ options, with applicants’ often applying for several properties at once in hopes of securing one but are not always proceeding when successful.”
Data from the Residential Tenancies Authority indicates the median length of house tenancies increased to 21.1 months in 2024/25, up from 20.8 months the previous year. For units, the median remained steady at 18.2 months, a slight decrease from 18.3 months.
Mercorella (pictured right) also noted a shift in landlord sentiment, as ongoing market tightness, increased costs, and legislative changes have led to more instances of tenants breaking leases early. “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.
“Many owners are showing growing frustration over successive early break leases and have a reduced tolerance and financial capacity to absorb extended vacancy periods, which leave them to pay for new advertising and letting costs, and limited rent compensation.”
She added that while the rental crisis is widespread, not all areas are equally affected. “Higher price-point properties, lower quality stock, or niche segments may see listings remain for longer, as demand can be more price-sensitive or selective,” she said. “Additionally, properties that are not priced in line with the market are struggling to find tenants.”
Looking ahead, Mercorella believes the situation is unlikely to improve 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 emphasised that the ongoing mismatch between supply and demand persists, with the current housing mix unable to meet needs. “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 said. “Without policy and planning settings that actively unlock supply, and without fair and balanced rental legislation that encourages investors, this gridlock will persist.”
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