All capital cities recorded declines in vacancy rates over the month except for Melbourne which recorded a 0.1% increase to 3.1% for July.

Sydney currently has the highest vacancy rate in the nation at 3.6%, having declined by 0.2%.  Hobart’s vacancy rate is the lowest in the nation at 0.7%, having declined by 0.2% over the month.

Darwin recorded the largest decline in rental vacancy rate of 0.4% to now record a low vacancy rate of 1.4%.

Some capital city CBD locations have also recorded declines (from their record highs) in vacancy rates over the month, namely Sydney CBD dropping to 13.2%, down from 13.8% in June; Brisbane CBD’s vacancy rate decreased from 14.0% in June to 13.0%. Melbourne’s CBD remained stable at 8.8%.

However, Adelaide CBD has increased to 7.6% from 7.1% in June and Perth CBD is now up from 5.3% to 5.5%.

Asking rents

Over the month, Capital City average asking rents decreased 0.6% for houses and 0.9% for units for the week ending 4 August 2020 to record asking rents of $534 per week for houses and $419 per week for units.

Sydney, Melbourne and Brisbane recorded declines in asking rents for both houses and units over the month. Melbourne recorded the highest decrease of 1.4% for both houses and units.

Perth, Adelaide, Canberra, Darwin and Hobart recorded increases in house and unit asking rents. Perth recorded the highest increase in asking rents for houses by 3.2% and Hobart’s unit market increased by 5.9%.

Year on year, Sydney, Melbourne, Darwin and Hobart also recorded declines in asking rents for both houses and units, Sydney in particular recording a high 7.8% decline for houses and 6.8% decline for units in July 2019.

Commentary

Louis Christopher, Managing Director of SQM Research said, “Rental vacancy rates for most capital cities recorded a decline over the course of July. We are now observing a clear trend of reduced rental vacancies in outer suburban locations and regional locations around Australia. However, when looking into the numbers it is clear there are still very elevated levels of rental vacancies in the inner-city locations. We believe there has been a move towards outer regional living and away from high density areas. This very likely has been as a result of fears surrounding Coronavirus and the ability for many employees (particularly in the corporate sector) to work remotely.”

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