Vacancies fall further and rents are rising everywhere

Posted on 26/04/2007  

Rental vacancies are at their lowest in four decades and rents are rising in all major cities.

Federal Treasury’s official figure for residential vacancies nationwide is 1.36% - the lowest figure since they started keeping records in 1969. Three years ago the national vacancy figure was around 4%.

Vacancies are likely to become even tighter, because there is still an under-supply of new construction. The latest ANZ Housing Snapshot predicts vacancies will fall below 1% by the end of the year, pushing rents “significantly higher in coming years”.

Vacancies already are below 1% in Adelaide. The Real Estate Institute of South Australia reports that the official March vacancy figure was 0.9%, down from 1.03% in February.  March is the 21st consecutive month of vacancies under 2% in Adelaide.

Residential rents rose in all capital cities in the March quarter. Data in the Consumer Price Index shows that rents overall rose 1.4% in the quarter.

The REISA says rents for three-bedroom houses rose between 3% and 7% in some areas of Adelaide in the March quarter. The average rent for a North Adelaide home was $460 in the December quarter and rose to $495 in the March quarter.

Victoria’s Office of Housing says that Melbourne rents rose an average 6.4% in 2006 (the largest annual rise since 1999). In Inner Melbourne, median rents rose 5% in the December quarter.

Community groups and industry organisations like the Housing Industry Association have been lobbying Canberra to address housing affordability in the Federal Budget on 8 May. But Treasurer Peter Costello has argued that it’s all the fault of state governments because of stamp duty.

Costello argument is wrong, and he’s knows it’s wrong, but it suits all levels of government to blame each other rather than doing something about the problem.


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