Vacancy Rates Drop, With Rents Up

Posted on 20/09/2018  
Vacancy Rates Drop, With Rents Up

Data released by SQM Research this week has revealed the average national vacancy rate dipped to 2.1% in August, with five of the eight capital cities recording month-on-month decreases in vacancies, while two others remained unchanged.

In annual terms, four cities – Adelaide, Brisbane, Perth and Canberra – now have vacancy rates considerably lower than 12 months ago, while Melbourne is unchanged. Hobart’s vacancy rate has risen in 12 months but at 0.5% remains the lowest among the capital cities.

Sydney and Darwin have both recorded higher vacancies in annual terms.

SQM says Sydney's vacancy rate (2.8%) remains at its highest level in 13 years as an oversupply of rental property emerges there, which is keeping asking rents down. Melbourne was much lower at 1.6%.  

Hobart dropped to 0.5% in August, from 0.7% in July, but was slightly higher than the level of 12 months ago (0.3%). Canberra's vacancy rate slipped to 0.7% in August, down from 0.8%.

Brisbane has seen a sustained reduction in its vacancy rate, which fell to 2.8% in August, down from 2.9% in July and 3.4% a year ago. Perth dropped to 3.7% and is well down from 4.9% a year earlier as the oversupply of rental properties eases in that city. 

Darwin bucked the trend and rose to 3.5% from 3.4% in July.  

“The trend for the Sydney vacancy rate is definitely up and, as a result, Sydney is increasingly becoming a tenant’s market,” says SQM managing director Louis Christopher.

 “Over the year to September, asking rents for houses in Sydney dropped by 3.4% and we expect to see further falls. In contrast, the tight rental markets in Hobart and Canberra is continuing to push asking rents higher.”

Overall, on average, capital city asking rents for houses rose over the month by 0.7% to $552 a week. Unit asking rents were steady at $440 a week.

Over the year, asking rents for houses and units rose just 0.5%. The asking rent for a three-bedroom house in Sydney remains the highest nationwide at $708 a week and units $515 a week, Canberra asking house rents follow at $636 a week for houses and $439 for units.

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