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Vacancies Fall In Most Capital Cities

Another batch of real estate data has been published showing little or no impact, to date, from the virus crisis.

New data released by SQM Research today has revealed that residential vacancy rates fell in five of the eight capital cities in March and remained unchanged in the other three cities.

The vacancy rate fell slightly in Brisbane, Perth, Adelaide, Canberra and Hobart.

The national residential rental vacancy rate has remained unchanged at 2.0%, compared to February, and was slightly lower than March 2019.  Only Melbourne and Hobart have higher vacancy rates compared to this time last year.

All eight capital cities have vacancy rates below the benchmark of 3% and five of them are below 2%. This means most cities are well-placed to absorb the expected rise in vacancies as a result of job losses and investors who previously used Air BNB placing their properties in the residential rental pool.

SQM’s Louis Christopher says: “The minor decline in most capital cities’ vacancy rates for March was somewhat surprising given the uncertainty around the economy.”

He says that, with job losses, a freeze in migration and an expected sharp rise in short-term accommodation vacancies, we are likely to record significant increases in rental vacancy rates as 2020 progresses.

It is noticeable that while vacancies have remained stable, rents have dropped in some cities in the past month.

As an average across the nation, asking rents fell 1.8% for houses but rose 0.5% for apartments.

The average for the capital cities, however, was a monthly drop of 3.2% for houses and 2.9% for apartments, caused primarily by significant decreases in Sydney.

Monthly rises were still recorded for houses in Perth, Adelaide, Darwin and Canberra, and for apartments in Perth and Adelaide.

SQM Research today also published it latest price data, including the rolling monthly changes in its prices indexes. In the capital cities, the rolling month index shows a 0.3% rise for houses and a 0.1% rise for apartments.

So still no major evidence of a big impact on property prices, despite the fact that the first of the share-market meltdowns happened eight weeks ago on 20 February.

The rolling monthly index recorded rises for houses in Melbourne, Canberra, Darwin and Hobart, and for apartments in Sydney, Melbourne, Adelaide and Canberra. There was no change to the monthly indexes for Perth, either for houses or apartments – and no change for the Brisbane apartments index.

The figures show that the monthly changes, whether up or down, were extremely minor, so that it seems markets in the capital cities are marking time, without any major reaction – as yet – to the virus crisis.



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