The risk of an imminent collapse in apartment values in the key Sydney and Melbourne markets has been dispelled with new research showing vacancy rates remain historically low.
The SQM Research report showed that while the number of national residential vacancies had risen during April, both Melbourne and Sydney remained below the equilibrium rate of about 2.5 per cent.
Sydney’s vacancy rate in April stood at 1.7 per cent and Melbourne was at 2.1 percent. Nationally, the vacancy rate was 2.5%, with 75,749 vacancies.
Year-on-year results demonstrate that national vacancies appear to be slightly above the common seasonal trends expected at this time of year.
“There’s been a lot of fear mongering going on, but we’re not expecting an oversupply to hit any time soon,” SQM Research director Louis Christopher told The Australian. “Construction has lifted, but population growth of around 20,000 is well in advance of construction and new development.”
Perth recorded the largest monthly rise, with vacancies increasing by 0.5 percentage points during the month of April. Canberra also experienced a reasonable monthly rise, with percentage points up 0.3%.
“The vacancy rate for Perth is now at a record high based on our series. It is suggestive that the housing downturn in Perth has yet to bottom out and that rents, which are already well down from their peaks in 2012, still have further to fall,” Mr Christopher said.
In contrast, vacancies remained the same in Hobart over the month of April, with a tight rate of just 0.9% based on just 240 vacancies.
Perth continues to record an alarming number of vacancies, particularly when one considers the amount recorded this time last year (April 2015), with vacancies climbing a total 1.1%.
Hobart continues to record the most affordable rental accommodation with rents for houses at just $350 a week, while Adelaide recorded the most affordable unit rent, averaging $285 a week.