Perth heads a nation of low vacancies

By Michael Matusik, 22nd August 2012

Vacancy rates in most of our capital cities are relatively low. The national rate sat at 1.9% last month, but it’s been slowly rising throughout 2012.

Rental vacancies in or near mining towns are up and down, but what’s happening in our bigger regional cities?

Let’s take a look around the nation, according to figures from SQM Research.

In Queensland, Cairns is sitting on 1.6%, after dropping consistently all year. Townsville’s vacancy rate is higher at 2.8% – but both northern centres had four times those rates just three years ago. Closer to the mining areas, Mackay’s vacancy rate has plummeted to just 0.9%, and Gladstone is sitting on 1.2% with just 30 homes up for rent in July. Emerald’s rate is actually on the rise, all the way up to 0.3% – or 10 properties.

The news is still bad from Moranbah, where the vacancy rate remains up in the stratosphere at 5.1% – the result of mining giant BMA’s dummy spit over high rents. Looks like most of the miners prefer to live in nearby Mackay.

Closer to Brisbane, Toowoomba’s vacancy rate is stabilising at 1.1%, after dropping all year.

New South Wales’ biggest regional centres, Newcastle and Wollongong, have vacancy rates in line with the national average – 2.1% and 1.9% respectively. Head west of Sydney and it’s not so rosy – in Orange, where the 2011 Census confirmed a substantial population drop, vacancy rates have climbed sharply to sit at 3%. Further west, Dubbo is still a star at 1.4%, as is country music capital Tamworth at 1.5%. On the north coast, Port Macquarie has dropped to 1.8% while Coffs Harbour remains relatively steady at 2.1%.

The vacancy rates in regional Victoria are consistently above the national average. Geelong dropped to 2.4% in July after a sudden spike in May. Ballarat’s vacancy rate also dropped in July, to 2.4%, after climbing all year – and it’s a similar story in Bendigo, where vacancies are currently at 2.2%. The rate for Albury-Wodonga, on the NSW-Victorian border, has also climbed to about 2% combined.

Head over to WA – the nation’s GDP powerhouse – and regional rental accommodation isn’t so easy to come by. Mandurah and Geraldton are both boasting low vacancy rates of 1.2%, but Bunbury’s rate is zero – and has been for nearly two years. Even Perth is leading the capitals, with a vacancy rate of 0.7%. It looks like we’ve worked out where everyone’s moving to! Only Karratha appears to be bucking the WA trend, with an unusually high vacancy rate of 4.3%. Perhaps it will settle down after its massive growth spurt and construction phase.

In South Australia, Whyalla is coping well with its Olympic Dam demands – the vacancy rate has dropped to 1.9%, down from nearly ten times that figure just two years ago. Port Lincoln is down to 1.5%, while Port Augusta has been rising dramatically only to pull back in July to 2.1%.

Things are a bit crook in poor old Tassie. Vacancy rates have practically doubled in both Hobart and Launceston in two years, with Launceston still climbing and currently sitting on 3.9%.

It’s good news for retiring baby boomers arriving from the mainland with smaller post-GFC nest eggs – but very bad news for existing investors. The 2011 Census also confirms Tasmania lost more people to the mainland in the decade from 2001, than it gained.

It’s a long road ahead when their bright young sparks are all moving to… well, Perth and Mackay.

Michael Matusik

Michael Matusik is a leader in residential market analysis and property advice in Australia.

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