Figures released this week by SQM Research reveal a clear rising trend in vacancies for Perth, Canberra and a number of mining towns.
For other capital cities, vacancies generally remained steady or modestly declined for the month of March.
The net result at a national level during the month was 52,931 vacancies, which represented a vacancy rate of 1.9%, similar to the month preceding.
Rising vacancies in mining towns
However, what is most notable has been the rise in vacancy rates for a number of well-known mining and resources related towns. The rises have been occurring for more than just one month. Some of the towns recording rises include:
- Gladstone (QLD) 5.6%
- Karratha (WA) 3.7%
- Kalgoorlie (SA) 2.3%
- Roma (QLD) 2.6%
- Port Hedland (WA) 4.6%
Canberra’s rise in rental vacancies has also been noticeable since July 2012 and may be associated with a well-known increase in apartment developments, together with federal government attempts to reduce the budget deficit.
At this stage, it is too early to make a valid assumption as to why vacancies may be beginning to loosen in Perth, however it should be noted SQM Research regards the vacancy rate in this capital city as still in favour of landlords.
Contrastingly, the Melbourne property market has revealed a gradual decline in vacancies over the past months, falling from above 3% in December 2012 now down to 2.6% in March 2013. This is seen as a positive for this capital city, which has been recording elevated levels in vacancies for quite some time now.
Managing Director of SQM Research Louis Christopher says,
“We are now watching the data very closely on the various mining towns in the country. Property investors over the past ten years have done extraordinarily well if they held real estate in mining towns. However, there is always a risk that when a down turn arrives that these markets could have a very rapid and severe correction. We remind investors to remain very cautious when it comes to these towns.”