Vacancy rates rise modestly in April

From

Data released by SQM Research this week has revealed vacancy rates edged higher across most capital cities in April. Nationwide, the number of national residential vacancies rose to 76,959 rental homes, giving a national vacancy rate of 2.4%, up modestly from 2.3% in March 2017.

In Melbourne and Sydney, vacancy rates sat at 1.6% and 1.8%, respectively, a slight retracement from March’s low levels. In Canberra, the vacancy rate rose to 1.0%, while the vacancy rate jumped in Perth to 4.9%. The vacancy rate only fell in Darwin to 3.4% while it was steady in Hobart at 0.6%.

 

 

Managing Director of SQM Research, Louis Christopher, said the numbers reflected still tight rental markets in the nation’s biggest cities as well as the nation’s capital.

“While the rise in vacancy rates may give tenants a slight reprieve, the trend is still up for asking rents in Sydney and Melbourne, to the point where they are unaffordable for many people. We are nowhere near to seeing any signs of an oversupply of units in either inner-city unit market,” said Christopher.

Asking rents
Despite a higher vacancy rate, asking rents edged higher in Melbourne over the month to May 12, up by 0.3% for units and 0.2% for houses, giving annual price rises of 4.7% and 6.4%, respectively. In Canberra too, growth in asking rents is high, at an annual pace of 9.3% for houses and 6.0% for units.

Annually, asking rents for houses has moderated in Sydney to 2.9% for houses and 3.2% for units, with asking rents for houses down by 0.6% over the month. But the asking rent for a three-bedroom house in Sydney now sits at a lofty $743 while for units it sits at $521, an unaffordable level for many of the city’s inhabitants on lower incomes.

In contrast, Darwin asking rents continued to fall, down 3.4% for houses over the month, while unit rents were down 1.1%. Perth has again posted the largest yearly declines, with unit asking rents down 9.4% and house rents down 7.5%.

 

 

SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties. SQM considers this to be a superior methodology compared to using a potentially incomplete sample of agency surveys or merely relying on raw online listings advertised. Please go to our methodology page below for more information on how SQM’s vacancies are compiled.

Key Points

  • Nationally, vacancies rose during April, recording a rate of 2.4%, up from 2.3% in March.
  • Perth recorded the highest vacancy rate of the capital cities at 4.9%, up from 4.7% in March.
  • 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% to 1.0% in April.

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