Rental vacancy rates hit 16-year low of 1.3% – capital city market rents rise by 7.5%

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SQM Research has revealed national residential property rental vacancy rates sharply decreased to 1.3%, down by 0.3% over January 2022. This represents a 16-year low for the national rental vacancy rate as reported by SQM Research.

Vacancy rates

The total number of vacancies Australia-wide now stands at 47,977 residential properties, down from 57,558 in December. Sydney, Melbourne and Brisbane vacancy rates decreased to 2.1%, 2.7% and 1.1% down from 2.6%, 3.2% and 1.3% in December. In Perth, Adelaide, Canberra, Darwin and Hobart vacancy rates remained below 1.0%. Vacancy rates fell in the Sydney CBD to 4.5% and Melbourne CBD to 4%.

Capital city vacancy rates have now returned to normal longer-term averages recorded prior to the Covid19 outbreak. SQM Research forecasts further falls in CBD rental vacancy rates as the internal border reopens and a part return to ‘working from the office’ continues.

Louis Christopher, Managing Director of SQM Research said: “We were expecting a drop in rental vacancies over January due to seasonality, however the drops were larger than expected. And worse for tenants, the weekly rental listings in February to date have fallen further for our two largest capital cities.

All this represents an acute shortage of rental properties. And the shortage has already been translating into large surges in weekly rents across the country. It is now very likely market rents will rise by over ten per cent this year. Indeed, it could actually be much more than this as we are recording a rise in capital city combined rents of 5.2% just in the last 90 days.

As such there are major ramifications for core and headline inflation.”

Rents

National asking rents rose 0.7% for houses to $560 per week and 1.9% for units at $424 a week. Capital city rents rose by 1.8% for houses over the past 30 days to stand at $622 a week. Rents for units rose by 1.6% to stand at $442 a week.

Combined capital city asking rents rose by 5.2% over the past 90 days and are up by 7.5% for the past 12 months to stand at $505 a week.

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