Australian capital city asking rents have recorded the largest monthly rental falls since the outbreak of Covid with a combined dwelling rent decline of 0.5% for the capital cities over the past 30 days to 12th of August.
Sydney recorded a decrease in combined rents, dropping by 1.0% to $829 per week. Melbourne also recorded declines of 0.6% with combined rents falling to $632 per week.
In what will be a surprise to many, Brisbane and Perth also recorded falls in rents with Brisbane falling by 0.5% and Perth falling by 0.6%. All up, five capital cities recorded falls in market rents with Hobart falling the most by 1.6%.
In contrast, cities like Adelaide and Darwin saw increases, with Adelaide’s house rents rising by 1.1 and 6.4% respectively.
The falls in rents were more notable in coastal regions and well as some CBD locations. Queensland’s Gold Coast recorded a 1% decline for the month and Victoria’s Mornington Peninsula recorded a fall of 1.4% decline. While Sydney’s CBD recorded a 1.6% decline in market rents.
Vacancy rates hold steady at 1.3%
Meanwhile, national rental vacancy rates remained steady for the month at 1.3% which still indicates the rental market remains in shortage despite the recent falls in asking rents.
In July 2024, Sydney maintained a rental vacancy rate of 1.7%, with 12,123 rental dwellings vacant, unchanged from the previous month. Melbourne also saw a stable vacancy rate of 1.5%, with a slight increase in the number of vacant dwellings from 7,864 in June to 7,979 in July. Over the past 12 months, Sydney vacancy has rate remained consistent, while Melbourne’s rate has risen by 0.2% compared to July 2023.
Canberra recorded the highest rental vacancy rate of any state or territory at 2.2%, marking for a slight increase from 2.1% in June 2024. Perth and Adelaide continued to report some of the lowest vacancy rates, both at 0.7%, reflecting tight rental markets in these cities. Darwin experienced a decrease in vacancies, with the rate dropping from 0.9% in June to 0.7% in July, indicating a further tightening of the rental market there.
Hobart showed a notable decline in vacancies, with the rate falling from 1.5% in June to 1.2% in July.
The total number of rental vacancies across Australia now stands at 39,701 residential properties, a slight decrease from the 40,486 vacancies recorded in June 2024, but still above the 38,864 vacancies in July 2023.
Vacancy rates in the Sydney CBD recorded a large increase from 5.0% in June 2024 to 5.5% in July 2024. Melbourne CBD saw a slight decrease from 4.3% in July 2023 to 4.0% in July 2024, indicating a marginal increase in demand for rental properties. Brisbane CBD continued to experience strong demand with a low vacancy rate of 2.5%. Canberra CBD experienced dramatic decrease from 4.0% in July 2023 to 2.7% in July 2024.
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 for more information on how SQM’s vacancies are compiled.
Louis Christopher, Managing Director of SQM Research said: “For the past 30 days, SQM Research has recorded the largest decline in capital city rents since the days of 2020 when Covid first hit the country.
The falls were broad based, with the larger falls recorded in our larger capital cities and regional coastal locations.
It should be noted of course that rents are still very high and this retracement is minor compared to the massive rise in rents recorded around the country since 2021. And it should also be stated that the rental crisis is still not yet over as we have recorded an ongoing low national rental vacancy rate of just 1.3%.
But still, this will be somewhat welcoming to tenants and as a research house, we do believe the market rental rises of 10 to 20% per annum are now over.”
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