Vacancy rates fall in May

Data released by SQM Research revealed the number of national residential vacancies was 73,229 rental homes, giving a national vacancy rate of 2.2%, down from 2.4% in April 2017.

Vacancies fell again in Melbourne to around a 7-year low level of just 1.5%, down from 1.6% in April and from 1.9% a year earlier.

The vacancy rate remained very tight in Hobart at 0.6%.

The vacancy rate was steady in Sydney at 1.8%.

Key Points

• Nationally, vacancies were steady in May, recording a rate of 2.4%.
• Perth recorded the highest vacancy rate of the capital cities at 4.8%, though down from 4.9% in April.
• Hobart recorded the lowest vacancy rate of 0.6%, steady from the previous month.
• Canberra’s vacancy rate has edged off a five-year low of 0.8% in March to 1.0% in May.

The numbers reflected still tight rental markets in the nation’s biggest cities Melbourne and Sydney, where renters are battling fierce competition to find a home, as well as facing higher rents.   

As the table below of asking rents indicates, the trend is still up for unit asking rents in Sydney and Melbourne over the year, which are rising well above the inflation rate, given a shortage of rental properties.

That’s also the case in Canberra and Hobart where a more acute shortfall of rental properties has pushed the vacancy rate down to 1% and 0.6%, respectively.

Significantly, the vacancy rate remains at a very low level in Melbourne despite new apartment supply coming on to the market.

In Sydney too, the vacancy rate is hovering at low levels, despite high levels of inner-city apartment construction.

This reflects the fact that population growth rates have been running in excess of expectations, absorbing extra stocks levels.

Only in Brisbane do we see new unit supply pressuring vacancy rates higher at 3.1%, up from 2.7% a year earlier.

That has pushed down growth in asking rents to modest levels, barely over 1% over the year.

Asking Rents

Annually, asking rents for houses moderated slightly in Sydney to 2.9% and were down by 1.4% over the month to June 20.

The asking rent for a three-bedroom house in Sydney still sits at a lofty $730 while for units it sits at $525.

Asking rents for units were up 0.6% over the month to June 20 and 3.5% over the year.

Annually, asking rents for houses in Melbourne rose 5.9% but were down by 0.6% over the month to June 20.

Unit asking rents rose 0.6% over the month to June 20 and 5.7% over the year.

The asking rent for a three-bedroom house in Melbourne now sits at $510 and for units it sits at $399.

In Perth and Darwin, asking rents are still falling as activity in those cities remains subdued due to the mining downturn.

Source: www.sqmresearch.com.au