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Sky-High Rents Are Pushing Tenants Towards Home Ownership

April 26, 2023 | IN Media Release and News | BY AVID | 4 min read

The gap between the cost of paying rent and a mortgage has reached the point where it makes more
financial sense for some south-east Queenslanders to jump out of the rental market and into the
property market.

That is the ‘open home chatter’ prominent Australian builder-developer AVID Property Group (AVID) is
increasingly hearing from prospective purchasers inquiring about move-in-ready house and land
packages across its south-east Queensland communities.

The desire to transition from tenant to homeowner is being felt more acutely in parts of SEQ where
rental vacancy rates are at record lows and rents are at record highs, including Ipswich and Logan-
Beaudesert. 1

The April pause on interest rate increases – following 10 consecutive hikes – combined with
population growth, which includes some interstate and international migrants bypassing renting and
moving straight into purchasing, is already lifting previously sluggish sales volumes.

AVID Queensland General Manager Bruce Harper said sales teams at its more affordable move-in-
ready communities – Chambers Ridge in Logan and Brentwood Forest in Ipswich – had reported
buyer concerns about the rental crunch and what it meant for their future housing choices.

Mr Harper said first-home buyers generally comprised the largest pool of tenants – followed by
permanent interstate or international migrants – looking for property.

“Currently more than 70 per cent of sales inquiries at Chambers Ridge – where completed homes start
from $575,000* – are coming from first-home buyers,’’ he said.

“At Brentwood Forest – where completed homes start from $613,000* – 50 per cent of inquiries are
from first-home buyers.’’

Mr Harper said the difference between what a young couple might be paying in rent each month
versus a mortgage had narrowed substantially over the past year, despite interest rates being at a 10-
year record high.

“We’ve heard from potential purchasers that their rents have increased by up to $200 per week in
some outer Brisbane suburbs which adds an extra $10,000 to their annual housing costs,” he said.

“That’s a significant amount of extra money going towards their landlord which could be used to help
pay off their own home.”

Mr Harper said first-home buyers were also drawn to the financial savings and security of new
residential communities like Chambers Ridge and Brentwood Forest because AVID’s exclusive
builder, Villaworld Homes, carried the majority of costs until settlement.

“Departing from the typical instalment-based residential building contract, AVID offers a single fixed-
price house and land contract with a minimal deposit,’’ he said.

“Buyers don’t pay another cent until the home – which includes air-conditioning, window blinds,
fencing, a driveway, and landscaping – is completed.

‘’That means owner-occupiers aren’t experiencing the double whammy of paying rent and building
costs at a time when household budgets are under pressure from cost-of-living increases and interest
rate rises.

“Dealing with a builder-developer like AVID and Villaworld Homes – which has built more than 45,000
homes over 36 years – also gives buyers peace of mind knowing their home will be built.’’

Mr Harper said the imbalance in property demand and supply, which was at the root of the current
rental crisis, stemmed from a lack of available, well-located greenfield land in Queensland’s SEQ
growth corridor.

“It’s good to see the State Government has taken proactive steps through its Growth Areas Team to
work towards unlocking more land to create new residential communities in collaboration with local
councils, state agencies, utility providers and the development industry,” he said.

“The government’s commitment to review the SEQ Regional Plan – ShapingSEQ – is also a welcome
chance to ensure the plan is updated and amended to reflect current population and dwelling growth
trends to release land for residential developments in locations where people want to live2.

“Queensland is Australia’s fastest growing and most popular state. In the 12 months to September
2022 almost 47,000 people from other states and territories moved to Queensland – the highest of any
other state – driving our annual population growth rate to a national high of 2.2 per cent. An additional
43,000 international migrants also made Queensland home over the same period3.”

1. Housing affordability background paper for summit 201022.docx (treasury.qld.gov.au)


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