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Vacancies Nudge Higher but Rental Market Still Tight

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New data shows a small light has flickered on at the end of Australia’s national rental crisis tunnel. 

At least, that’s the cautiously optimistic view. 

According to the latest report from SQM Research, the national residential property rental vacancy rate edged fractionally higher in April—rising to 1.1 per cent. 

Marginally above the 1 per cent vacancy rate recorded in March, it is the first increase this year. 

“Rental conditions slightly improved for tenants over April and our weekly rental listings for May suggest another slight easing,” SQM Research managing director Louis Christopher said. 

“Potentially more property owners are responding to the tight rental market and are looking to lease their properties once again after taking their investment property off the market during the bleakest periods of Covid. 

“So, while it’s way too early to state the worst is over for the national rental market, we may be close to that point.” 

As the new figures indicate, the number of available properties now stands at 39,616, about 40 per cent less than the same period last year but up from 36,868 in March.  

Sydney, Melbourne and Brisbane vacancy rates remained stable at 1.6 per cent, 1.9 per cent and 0.7 per cent respectively. 

But in the smaller capital cities of Perth, Adelaide, Canberra, Darwin and Hobart, rental conditions eased a little with vacancy rates increasing. 

Nevertheless, with rental vacancy rates ranging from 0.4 per cent to 0.7 per cent, conditions remained extremely tight. 

CBD rental vacancy rates rose in Melbourne to 2.9 per cent from 2.4 per cent and in Sydney to 3.5 per cent from 3.4 per cent. 

The average regional rental vacancy rate remained well below 1 per cent despite some regions recording a slight lift in vacancies. 

Meanwhile, over the past month, capital city asking rents have jumped nationally with the 12-month increase now standing at 13.8 per cent. 

“Clearly landlords remain confident as they lifted their asking rents by another 1.4 per cent over the past 30 days,” Christopher said. 

Average house rents in the major cities have recorded 12-month increases of 15.3 per cent and unit rents have risen by 13.1 per cent, up 0.3 per cent and 1.5 per cent, respectively, since March.

New research commissioned by Hood.ai has revealed Australia’s top 20 locations where landlords are likely to push up rents at the next rental review.  

Australia’s top 20 suburbs where rents are set to rise

RankStateSuburbProperty typeMedian weelkly rentAnnual rental increaseVacancy rate
1NSWBogangarUnit$65052.9%0.5%
2QldBurrum HeadsHouse$50051.5%0.9%
3QldAvocaUnit$33050.0%0.4%
4NSWHastings PointUnit$65047.7%0.0%
5QldParadise PointHouse$74547.5%0.7%
6WALeemingUnit$45045.2%0.4%
7NSWTarrawannaHouse$75044.2%0.0%
8NSWColo ValeHouse$60042.9%0.0%
9NSWBrunswick HeadsHouse$79542.0%0.6%
10NTHoward SpringsHouse$69541.8%0.0%
11WABeechboroUnit$38040.7%0.4%
12NSWCoomaUnit$33040.4%0.6%
13WAKambalda WestHouse$28040.0%0.6%
14NSWSussex InletUnit$41538.3%0.6%
15QldChelmerHouse$68537.0%0.7%
16NSWKahibahHouse$60036.4%0.0%
17VicRochesterHouse$38035.7%0.0%
18QldChuwarHouse$43034.4%0.0%
19WAQuindalupHouse$67034.0%0.0%
20QldPomonaHouse$60033.3%0.0%

^Source: Hood.ai

In all the suburbs, rents have increased at least 33 per cent during the past 12 months, and vacancy rates are under 1 per cent—in some cases 0 per cent. 

The top 20 suburbs are spread around New South Wales (8), Queensland (6), Western Australia (4), Victoria (1) and the Northern Territory (1). 

Of the suburbs, 17 are in regional locations and three are in the capital cities, while 13 are house markets and seven are unit markets. 

Topping the list is Bogangar at Cabarita Beach in northern NSW with an annual rental increase of 52.9 per cent. It is followed by Burrum Heads (51.5 per cent) and Avoca (50 per cent) in Queensland, Hastings Point (47.7 per cent) in NSW and Paradise Point (47.5 per cent) at the Gold Coast.  

“Vacancy rates are low in many parts of Australia, which is putting upward pressure on rents,” Hood.ai chief executive Tommy Fraser said. 

“Traditionally, when renters get priced out of an area, they tend to shift to a cheaper suburb nearby, but that’s become increasingly hard in the current market, which is forcing tenants to move even further in search of affordable accommodation.” 

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Article originally posted at: https://www.theurbandeveloper.com/articles/vacancies-nudge-higher-but-rental-market-still-tight