Figures released by SQM Research reveal that the level of residential property rental vacancies dipped once again during the month of October, recording at a vacancy rate of 2.0% and coming to a total of 57,471 vacancies nationwide.
In terms of the number of vacancies, this month’s figures reveal the fourth straight monthly decline on a national level – with Sydney, Adelaide, Perth, Canberra and Hobart all recording a monthly decrease in vacancy rates.
SQM Research does expect vacancies to begin to rise in the lead up the Christmas as this normally occurs during this time of year.
Observing the figures year-on-year, vacancies in some cities of Australia are much higher than this time in 2012, particularly in Perth, Brisbane and Canberra. Sydney has appeared to have held steady, despite a swift increase in sales activity in this capital city, pointing further to indications that the recovery being experienced there has been predominantly motivated by investors, rather that first home buyers at this stage.
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The city of Hobart is clearly recording lower vacancies than 12 months ago and is now getting to the point where there will be upward sustained pressure on rents as the market turns back into the favour of landlords.
Nationally it is the fourth straight month where rental vacancies have tightened though I note this same trend happened this time last year.
Sydney is an interesting case. We know the sales market is very active and normally in most recoveries, vacancies rise as renters turn themselves into first home buyers. But Sydney is now recording a very tight vacancy rate of 1.5%. Its evidence that the First Home Buyers are indeed remaining renters for longer.
If Sydney vacancies remain this low, that will put renewed upward pressure on rents again for next year.
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-