National Rental Vacancy Rates Decreased

The national residential rental vacancy rate recorded a decrease over the month from 2.5% in May to 2.2% in June 2020.  Buy Home In Australia

The financial year ended with the total number of vacancies Australia-wide now at 77,132 vacant residential properties.

This time last year, the national vacancy rate was slightly higher at 2.3%.

All capital cities recorded declines in vacancy rates over the month.  Sydney currently has the highest vacancy rate in the nation at 3.8%, having declined by 0.2%, followed by Melbourne with a vacancy rate of 3.0%, declining by 0.1%.

Hobart’s vacancy rate is the lowest in the nation at 0.9%, having declined by 0.4% over the month.

Darwin recorded the largest decline in rental vacancy rate of 0.5% to now record a low vacancy rate of 1.8%.

City June 2019 Vacancies June 2019
Vacancy Rate
May 2020 Vacancies May 2020
Vacancy Rate
June 2020 Vacancies June 2020
Vacancy Rate
Sydney 24,931 3.5% 29,416 4.0% 27,710 3.8%
Melbourne 11,720 2.0% 18,499 3.1% 18,116 3.0%
Brisbane 8,526 2.5% 8,780 2.5% 8,127 2.4%
Perth 6,732 3.2% 4,167 2.0% 3,272 1.5%
Adelaide 2,310 1.2% 2,293 1.2% 1,992 1.0%
Canberra 847 1.3% 880 1.3% 731 1.1%
Darwin 965 3.1% 727 2.3% 575 1.8%
Hobart 161 0.5% 386 1.2% 272 0.9%
National 78,679 2.3% 86,398 2.5% 77,132 2.2%

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.

Even among the capital city CBD locations, there have been declines in vacancy rates over the month.  Sydney CBD has dropped to 13.8%, down from 16.2% in May, Melbourne’s CBD and Melbourne Southbank have also declined to 8.8% and 16.2% respectively.

Adelaide CBD has dropped to 7.1% and Perth CBD is now 5.3%.

However, Brisbane CBD’s vacancy rate has increased from 13.3% in May to 14.0% and Sydney’s Palm Beach is now 18.0%, up from 16.7% in May.

Asking Rents

Over the month, Capital City asking rents decreased 3.1% for houses and 4.5% for units for the week ending 12 July 2020 to record asking rents of $534 per week for houses and $421 per week for units.

Sydney, Melbourne and Adelaide recorded declines in asking rents for both houses and units over the month.

Whilst Brisbane and Perth continue to record increases in house and unit asking rents.

Canberra and Darwin have had declines in house asking rents but recorded increases in unit asking rents.

SQM Research Weekly Rents Index
Week ending: 12 Jul 2020 Rent Change on
prev week
Rolling month
% change
12 month
% change
Sydney All Houses 636.2 -4.2 -0.8% -7.3%
All Units 470.5 -1.5 -1.3% -6.2%
Melbourne All Houses 525.7 -2.7 -1.3% -1.7%
All Units 401.6 -1.6 -0.8% -5.1%
Brisbane All Houses 467.8 0.2 1.2% 0.7%
All Units 380.9 0.1 0.8% 1.7%
Perth All Houses 459.9 5.1 2.2% 5.6%
All Units 351.2 -1.2 0.5% 3.5%
Adelaide All Houses 410.4 -0.4 -0.3% 2.6%
All Units 316.1 -0.1 -0.3% 2.1%
Canberra All Houses 617.5 -1.5 -0.7% -1.0%
All Units 471.6 -0.6 1.0% 2.2%
Darwin All Houses 481.6 -2.6 -0.8% -8.8%
All Units 363.4 6.6 2.5% -1.6%
Hobart All Houses 434.2 -2.2 0.2% -3.6%
All Units 371.3 0.7 -1.8% -9.0%
National All Houses 448.0 1.0 1.1% 1.4%
All Units 368.0 1.0 -1.3% 0.0%
Cap City Average All Houses 534.0 -3.0 -0.7% -3.1%
All Units 421.0 -2.0 -0.9% -4.5%

We believe the surprise fall in vacancy rates is due to Airbnb property owners giving up on the longer-term leasing market and moving back to short term leasing, especially in light of the July school holiday period and the opening of some state borders. Rent

The fall in rents over the same period for a numbers of our capital cities suggests that the weakness in the rental market remains.

Going forward, our expectation is the Australian rental market will remain weak for the duration of 2020 or until such time as the international border reopens and we as a community have past the worst of COVID19.

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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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