Rental Vacancies Continue to Surge Favouring Tenants

Figures released by SQM Research this week have revealed that the number of residential vacancies increased during June, recording a 2.3% vacancy rate nationally and 69, 258 vacancies.

This result reflects a genuine upward trend in vacancies around the country, with the highest result since the December 2013 seasonal spike.

Key Points

  • Nationally, vacancies increased during May, recording a vacancy rate of 2.3% and coming to a total of 69,258 nationally.
  • Melbourne recorded the highest vacancy rate of the capital cities, revealing a vacancy rate of 2.7% and a total of 12,073 vacancies.
  • Darwin, Hobart and Adelaide have all recorded the tightest vacancy rate of the capital cities, all revealing a vacancy rate of 1.6% and a total of 424, 472 and 2,645 vacancies respectively.
  • Perth has recorded the highest yearly increase in vacancies, climbing by 0.9 of a percentage point to 2.5% since the corresponding period of the previous year (June 2013) and coming to a total of 4,716 vacancies.
  • Hobart recorded the largest yearly decrease in vacancies, falling by 1.0 percentage points to 1.6% since the corresponding period of the previous year (June 2013).
  • Melbourne recorded the highest monthly increase in vacancies, rising 0.3 of a percentage point to 2.7%.
  • Hobart was the only capital city to record a monthly decline in vacancies, dropping by 0.2 of a percentage point to 1.6% during June 2014.

More details:

With Hobart being the only capital city to record a monthly vacancy rate decrease, the remainder recorded either steady figures or rises during the month of June.

Melbourne has edged it way back up toward the 3% mark, revealing a vacancy rate of 2.7%, with Perth not far behind at 2.5%.

[sam id=37 codes=’true’]Interestingly, Perth’s vacancy rate has loosened considerably since the corresponding period of the previous year (June 2013) where vacancies were recorded at 1.6%. Darwin has similarly climbed in rental vacancies, surging from 0.8% in June 2013 to 1.6% in June 2014.

Hobart has headed in the polar opposite direction, falling from a vacancy rate of 2.6% in June 2013 to 1.6 percent in June 2014.

With gradual increases continuing to be witnessed in recent months, SQM Research is strongly of the opinion that a definite slowdown in the nation’s rental market is occurring.

Further to this, SQM Research’s Asking Rent’s Index has revealed a monthly stagnation in the capital city average’s asking rent with no change recorded month-on-month for houses, and a 0.7% decrease in asking rents for units. For each capital cities Asking Rent’s breakdown, click here.

At this stage the market is increasingly favouring tenants across the country.

While this is not yet a rout for landlords, it certainly is at a stage where rents will unlikely rise above inflation for the next 12 months. This means that rental yields will continue to fall, thereby reducing the net cash flows for new property investors in the market place.



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Louis Christopher

About

Louis is recognised as one of Australia’s most respected and impartial research property analyst. He has extensive knowledge and experience of property and is regularly quoted in the media on his insights and is director of SQM Research.
Visit www.SQMResearch.com.au


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