Residential rents continue to rise as vacancy rates fall further right across Australia, both in the capital cities and in the regional areas.
The best source of information on vacancy rates comes from SQM Research and their managing director Louis Christopher says vacancy rates in six of our capital cities are below 1% and they’re around 2% in both Sydney and Melbourne.
In most regional market, vacancies are well under 1% – and in some places they’re closer to zero than to 1%.
Now, keep in mind that accepted benchmark for a balanced rental market is a vacancy rate of 3% and anything under 3% represents a shortage.
Right now there’s a rental shortage crisis almost everywhere in Australia.
Inevitably, this means rents are rising. Often, when a property becomes available for rental in a market starved of supply, applicants will offer more than the asking rent to beat the competition – because typically there are 20 or 30 people queueing up at the open house.
Capital city rents have increased to an average of $630 per week for houses and $450 per week for units.
This follows the significant decreases in vacancy rates that have occurred in all cities in the past month and over the past year.
Louis Christopher’s analysis finds that Perth, Brisbane and Canberra have had the largest increase in rents for houses during the past month.
The latest increases mean rents have increased by 14% in the past 12 months for houses and by 8.5% for units.
And Christopher says: “Given a dramatic tightening in vacancy rates, we are seeing an ongoing acceleration in weekly market rents across the capital cities. We can expect capital city rents to rise by over 10% in 2022.”
If anything the situation is worse in regional Australia, where it’s common to see annual rent rises of 15 or 20%.
And what all this means is that right now is a great time to be a landlord in Australia.