National Rental Vacancy Rates Fall to Pre-Covid Levels

The national residential rental vacancy rate decreased by 0.2% over the month of January 2021 to stand at 2.0%. 

The total number of vacancies Australia-wide is now 71,297 vacant residential properties.

This time last year, the national vacancy rate was higher at 2.1%. Property 2

With the exception of Hobart, all cities recorded falls in vacancies for the first month of 2021.

This is a normal occurrence due to the seasonal high rates recorded in each December.

However, SQM Research notes that there are now less vacancies at the national level compared to January 2020 – just prior to the first outbreak of Covid-19 in Australia.

Melbourne’s vacancy rate decreased in the month (4.7% Dec 2020) to stand at 4.4% and continues to record the highest vacancy rate for any of the capital cities.

This time last year, Melbourne’s vacancy rate was low at 2.1%.

Sydney also recorded a fall in vacancies over January with the rental vacancy rate sitting at 3.2%.

Again, sharp falls in rental were recorded in the CBD rental market whereby vacancy rates fell to 6.2% after being as high as 16% in May 2020.

City January 2020
January 2020
Vacancy Rate
December 2020 Vacancies December 2020
Vacancy Rate
January 2021
January 2021
Vacancy Rate
Sydney 22,707 3.1% 27,251 3.6% 24,309 3.2%
Melbourne 12,229 2.1% 28,754 4.7% 27,432 4.4%
Brisbane 8,334 2.4% 6,190 1.8% 5,886 1.7%
Perth 4,337 2.1% 1,899 0.9% 1,808 0.8%
Adelaide 1,929 1.0% 1,458 0.7% 1,405 0.7%
Canberra 947 1.4% 753 1.1% 579 0.8%
Darwin 1,028 3.2% 282 0.9% 262 0.8%
Hobart 182 0.6% 175 0.6% 192 0.6%
National 72,422 2.1% 76,658 2.2% 71,297 2.0%

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.

There is more evidence the worse is over for landlords in the Sydney and Melbourne rental markets.

The falls in vacancy rates for the month in those two cities, combined with the increased tightness in other cities and regions, has now brought rental vacancy rates down to below where they were prior to the outbreak of Covid19.

Now to be clear, CBD rental vacancy rates in both Sydney and Melbourne remain elevated, despite recent falls.

And we remain of the view that there will not be a complete reversal of the sharp rise in rental vacancy rates experienced in these locations in earlier 2020.

Demand for inner city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns.

This will mean 2021 will remain largely a tenant’s market in the inner cities but will also very much remain a landlord’s market for regional Australia.

Asking Rents

Over the past 30 days to 12 February, Capital City average asking rents increased 0.7% for both houses and units to record asking rents of $552 per week for houses and $413 per week for units. House Model On Top Of Stack Of Money As Growth Of Mortgage Credit, Concept Of Property Management. Invesment And Risk Management.

The majority of capital cities recorded increases in both house and unit asking rents, with Sydney recording the highest increase of 3.2% over the period for houses and 2.2% in unit asking rents.

This is the first significant rise for Sydney February 2020. 12-month rents are still in the negative by 6.3% (houses) and 8.9% (units) respectively.

Melbourne continued to record declines in both house and unit asking rents over the month, falling by 0.1% and 0.4% respectively.  Interestingly, rents slightly rose in the CBD for units, a sign that the worse could be over for CBD landlords.

Canberra recorded increases in house rents of 2.8% and unit rents increased by 2.7%. Perth house and unit rents also increased over the month.


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Louis Christopher


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.

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