Vacancy rates increase in most cities in December

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Data released by SQM Research this week has revealed the national residential vacancy rate was 2.5% in December 2017, with the number of vacancies Australia-wide increasing to 80,092 – an increase on the month of November.

All capital cities have increased their vacancy rates in December however, Hobart’s vacancy rate continues to remain at a record low of 0.3% since October 2017.

Canberra and Adelaide’s vacancy rate also remains tight at 1.3% and 1.5% respectively.

Perth’s vacancy rate rose to 4.6% from 4.5% in November, and remains the highest of any capital city.

In the bigger cities, vacancies increased materially in Sydney to 2.6% in December, up from 2.1% in November. Melbourne also recorded increases with the vacancy rate now at 2.1%, up from 1.8%, however Melbourne’s vacancy rate was lower than recorded in December 2016. Brisbane’s vacancy rate rose from 3.4% to 3.8% over the month.

SQM Research graph of vacancy rates

Managing Director of SQM Research, Louis Christopher said, “the rise in vacancies continue into December due to seasonality and those in Hobart and Canberra continue to face ongoing tight rental conditions and higher rents.”

“However, the rise in Sydney was larger than expected, if these current vacancy rate levels hold in January and February, Sydney will be a tenant’s market in 2018.”

Asking Rents

Capital City asking rents over the month to 12 January rose 0.9% to $555 a week for houses. Unit asking rents also rose marginally to 0.7% to $440 a week.

Adelaide was the only city to record a decrease, with its house asking rents declining marginally by 0.1% over the month. Unit asking rents however, increased by 1.1% over the month.

The highest increase for houses was recorded in Darwin at 2.5% over the month, while asking rents for units jumped the most in Hobart by 6.7%. Compare this to Hobart’s asking rents for units in November which actually had the largest drop at 3.6% in that month.

Sydney continues to record the highest asking rent in the nation for a three-bedroom house at $730.60 a week and also for units at $520.80. Canberra follows at $606.10 a week for houses, with no change over the month. Units however, increased by 1.9% to $442.20.

Asking rents for houses rose in Melbourne, up 1.4% over the month to $522.30 while unit asking rents also rose 0.2% over the month to $396.70 a week.

SQM Research Weekly Rents Index graphic

Source: SQM Research

Key Points

  • Nationally, vacancies rose marginally in December to 80,092, recording a vacancy rate of 2.5%, up from 2.2% in November.
  • Hobart’s vacancy rate continues to remain at a record low of 0.3% since October 2017.
  • Canberra and Adelaide’s vacancy rate also remains tight at 1.3% and 1.5% respectively.
  • Perth recorded the highest vacancy rate of the capital cities at 4.6% in December, down from 5.5% a year ago.
  • Capital City asking rents over the month to 12 January rose 0.9% to $555 a week for houses.
  • Unit asking rents also rose marginally to 0.7% to $440 a week.
  • Adelaide was the only city to record a decrease, with its house asking rents declining marginally by 0.1% over the month.

Methodology

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.

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