National rental vacancy rate remains stable in September

From

SQM Research has revealed the national residential rental vacancy rate remained stable at 2.0% over the month of September 2020.  The total number of vacancies Australia-wide is now 70,389 vacant residential properties.  This time last year, the national vacancy rate was slightly higher at 2.1%.

Most capital cities recorded declines in vacancy rates over the month except for Melbourne which again recorded an increase from 3.4% in August to 3.8% for September.  The city has now surpassed Sydney as having the highest vacancy rate in the nation with an additional 2,316 vacant properties in Melbourne as stage 4 Covid-19 lockdown continues.

Sydney’s vacancy rate remains stable at 3.5%.  Darwin recorded the highest decline of 0.4%.

Canberra’s vacancy rate although increasing by 0.1% still records a low vacancy rate of 0.9%.  All other capital cities saw minor declines in vacancy rates to record low vacancy rates below 2.0%.  Hobart’s vacancy rate is the lowest in the nation at 0.6%.

 

 

Melbourne’s CBD continues to increase to a new all-time high of 10.8%, up from 10.0% in August. Brisbane CBD’s vacancy rate also increased to 12.5% up from 11.4% in August. However, Sydney CBD is slowly dropping from 12.9% in August to 12.8% in September.

Asking rents

Over the month, Capital City average asking rents decreased 0.4% for houses and 0.7% for units for the week ending 12 October 2020 to record asking rents of $527 per week for houses and $411 per week for units.

The two largest capital cities, Melbourne and Sydney continue to record declines in both house and unit asking rents over the month of September. Sydney in particular had the largest declines of 1.7% for houses and 1.2% for units.  Melbourne rents declined by 0.8% for both houses and units over the month.

However, Perth, Darwin and Hobart all recorded rental increases in both houses and units with Hobart recording the highest rental growth in the nation for both houses and units, 3.2% and 3.4% respectively.

Darwin increased by 1.9% for house rents and 1.8% for unit rents.  Perth’s rental increases were smaller for houses, 0.4% but units increased 1.4%.

Adelaide recorded a 1.2% increase in house rents but a minor 0.3% decline in unit rents.  Canberra recorded a 1.3% decline in house rents but a 1.5% increase in unit rents.  Brisbane saw a 0.7% increase in house rents and unit rents remained stable.

Year on year, Sydney and Melbourne recorded declines in asking rents for both houses and units, Sydney in particular recording a high 8.9% decline for both houses and units in September 2019.

 

 

Commentary

Louis Christopher, Managing Director of SQM Research said, “Elevated rental vacancy rates in Sydney and Melbourne continue to push city rents downwards. This is particularly the case in the CBD and inner ring suburbs close to the CBDs. However, outside Sydney and Melbourne vacancy rates are falling again. And then when we consider regional locations Vacancy rates have fallen below 1% which really represents the point of little to no rental vacancy. In short, in September the population was still looking to stay away from the large cities. We think this trend may soon reverse, but to what extent remains a mystery.”

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