The number of empty rental properties in Melbourne has reduced rapidly during June as more tenants take advantage of cheaper rents in more central locations, figures from SQM Research show.
Vacancies in Melbourne dropped by 0.2 per cent, from 3.7 per cent to 3.5 per cent, during the month as the city continued its recovery from the pandemic-induced jump in the number of vacant rentals, which peaked in September last year.
Melbourne had just over 21,000 estimated vacant rentals at the end of June, which, although significantly lower than last year, is still roughly double the pre-pandemic volume.
Melbourne’s inner-city rental vacancy rates also fell, recording a 7.9 per cent vacancy rate, down from 8.8 per cent for the same time last year.
Melbourne CBD reached a vacancy rate north of 11 per cent towards the end of its long 2020 lockdown.
AMP Capital chief economist Shane Oliver said the fall in CBD rents had affected other parts of the rental market in Melbourne as tenants could use the large drops as a bargaining tool when negotiating cheaper rents elsewhere.
“Melbourne’s currently vacancy rate mainly reflects units due to the absence of foreign students, the pandemic-driven desire to escape to houses in the suburbs and the relatively bigger impact the coronavirus has had on Melbourne,” Oliver said.
“We know there’s going to be more supply coming on. So, for the short to medium term, it’s going to stay a renter’s market in the inner-city areas for units.”
Rents, which on average fell between 30 per cent and 35 per cent depending on the property, have also rebounded with rents up 1.2 per cent for houses and 0.7 per cent for units across the month.
Rents still remain down 1.4 per cent for houses and 9.5 per cent for units over the past 12 months.
Correspondingly, vacancy rates dropped to 2.8 per cent during the month in Sydney and remained unchanged at 1.3 per cent in Brisbane.
In Adelaide, Canberra and Hobart, the vacancy rate remained below 1 per cent, while Perth and Darwin’s rates remained constant.
SQM Research managing director Louis Christopher said rental vacancy rates had continued to tighten across Australia’s largest capital cities.
“Meanwhile, there was some further evidence that we have reached the high point in regional occupancy and some relief for local renters may be coming later this year, notwithstanding Sydney’s latest lockdown,” Christopher said.
“Rents are now accelerating in our larger capital cities which may have ramifications for the CPI read in the coming quarters.”
Nationally the rental vacancy rate fell to 1.7 per cent over the month of June, from 1.8 per cent in May.
Across the capital cities, the average asking rents rose by 1.8 per cent for houses and 1.7 per cent for units.
Nationally, rents climbed by 15.1 per cent for houses and by 6.6 per cent for units during the past 12 months, lifted by strong rises in rents in regional areas where there is a shortage of rental accommodation.