For the first time in a long time, there has been an improvement in residential vacancies in Australia.
But the change is miniscule.
The national vacancy rate, according to SQM Research, increased from 1% in March to 1.1% in April – which means that there continues to be a chronic shortage of residential rental properties around Australia.
Six of our eight capital cities have vacancy rates well below 1%, with Adelaide and Hobart ultra low at just 0.4%.
And it’s not much better in Brisbane, Perth, Canberra and Darwin.
In the two biggest cities, which both had vacancy rates above 3% a year ago, vacancies are now below 2%.
Sydney is now 1.6% and Melbourne is 1.9% – with the re-opening of international borders and the return of overseas migrants and international students likely to be further pressure on vacancies.
Across regional Australia, locations with vacancy rates below 1% is the norm.
What this means, of course, is that there is tremendous upward pressure on rents.
We’ve all become accustomed to big increases in sale prices around Australia, but now we are seeing rental increases of similar magnitude because of this chronic shortage of rental properties.
In both Sydney and Adelaide, house rents have increased 20% in the past 12 months while Brisbane rents have lifted 21%.
Most of the other capital cities have had annual rent increases of 10 to 15%.
And it’s likely to get worse for tenants before it gets better.
We’ve just had a Federal election campaign in which there was a lot of talk about housing affordability, with the major parties revealing significant policies to address that hot-button issue, but absolutely nothing from any of the major political parties about the rental shortage crisis.
I get the feeling that our political leaders aren’t even aware there is a problem, which might explain why there are no policies to improve the situation.
This situation has come about because most of the political decisions at both state and federal levels over the past five years have discouraged property investment – and gradually, steadily, year by year, the pool of available rental properties has diminished.
And now it’s a genuine national crisis, with no end in sight.
