The Sydney rental market has recorded the highest vacancy rate in at least 13 years according to SQM Research.
Sydney’s rental vacancy rate rose to 2.8% in June with an estimated 19,572 residential rental dwellings sitting vacant and available for rent.
The vacancy rate rose from 2.5% recorded in May and 2.0% recorded in June 2017.
2.8% is the highest rental vacancy rate since at least 2005 when SQM Research commenced record keeping of rental listings.
Nationally, the residential rental vacancy rate rose to 2.3% in June (from 2.1% recorded in May) with the number of vacancies Australia-wide now sitting at 75,757 properties.
Most cities recorded a rise with Melbourne rising to 1.6%, Brisbane to 3.0%, Canberra to 0.9% and Adelaide rising to 1.5%. Rental vacancies remained steady in Perth (4.1%), Darwin (3.5%) and Hobart (0.7%)
It should be noted that there tends to be a seasonal rise in rental vacancies for the major capital cities during the month of June.
However it is SQM’s view that the rise recorded in Sydney goes beyond seasonal factors.
- Nationally, the vacancy rate was marginally up at 2.3% in June 2018, with the number of vacancies Australia-wide now sitting at 75,757 properties.
- Hobart continues to record the lowest vacancy rate, unchanged from May at 0.7%, followed closely by Canberra at 0.9%
- Perth recorded the highest vacancy rate of the capital cities, unchanged from May at 4.1% in June, but down from 5.4% a year ago.
- Melbourne’s vacancy rate continues to inch up to 1.6% from 1.4%.
- Sydney’s vacancy rate also rose to 2.8% from 2.5% and up from 2.0% a year earlier.
- Capital city asking rents for houses continue to fall over the month to 12 July 2018 by 0.4% to $549 per week, whilst units remain steady at $444 per week.
Capital city asking rents for houses fell over the month to 12 July 2018 by 0.4% to $549 a week. Unit asking rents remain steady at $444 a week.
Over the year, asking house rents rose just 0.5%, while unit asking rents rose modestly by 0.9%.
While the asking rent for a three-bedroom house in Sydney remains the highest in the nation at $709 a week, rents fell 0.8% over the month to 12 July, with the upward trend in the vacancy rate easing pricing pressures. Asking unit rents in Sydney now stand at $522 a week, down by 0.2% over the month.
Sydney was the only city to record falls in rents for the year with rents for houses down by 2.2% and units down by 0.1%
Canberra also recorded monthly falls in rents for both houses (0.1%) and units (2.5%) however rents are well up by 13% over the past 12 months for houses.
Melbourne’s house rents fell by 1.3% for the month but unit rents rose marginally by 0.1%.
Brisbane, Darwin, Adelaide and Perth house rents continue to register small increases in the past 30 days.
However, rents for units in Adelaide fell by 0.2%, making it the cheapest capital city to rent a unit at $299.60 a week.
Adelaide is also the cheapest capital city to rent a house, with the asking rent sitting at $383.10 a week, although there is an increase of 0.9% for June.
Rental vacancies are rising and rents are easing in Sydney due to a surge in building completions and potentially a mild slowdown in the population growth rate.
There is now a greater supply of rental accommodation at a time when the growth in rental demand is probably falling a little.
Sydney rents are now down for the year and it is likely rents will continue to slip as there is still a lot of supply coming in the pipeline.
Sydney will shortly record a fall in its population growth rate due to a relatively recent steep rise in interstate migration towards Queensland.
This is the only time in my career that I can say with certainty that Sydney is now a buyer’s and a renter’s market, simultaneously.
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