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Vacancy Rate Drops to Fresh 16 Year Low

The national residential property rental vacancy rates fell to 1.2% in February 2022, a fresh 16-year low and down from 1.3% in January 2022.

Available rental properties plunged in the Melbourne and Sydney CBDs while capital city asking rents have 9.4% over the year to March 12, which is likely to add fuel to inflation.  House Model On Top Of Stack Of Money As Growth Of Mortgage Credit, Concept Of Property Management. Invesment And Risk Management.

The total number of vacancies Australia-wide now stands at 43,844 residential properties, down from 47,977 in January.

Sydney, Melbourne and Brisbane vacancy rates fell to 2.0%, 2.3% and 0.9%, respectively, down from 2.1%, 2.7% and 1.1% in January.

In the smaller capital cities, Perth, Adelaide, Canberra, Darwin, and Hobart, vacancy rates sat well below 1.0%.

Vacancy rates plunged in the Melbourne CBD to 2.8% from 4.0% and fell in the Sydney CBD to 4.3% from 4.5%.

SQM Research forecasts further falls in CBD rental vacancy rates as international borders reopen and a partial return to ‘working from the office’.

Total Listings

Asking Rents

Over the month to 12 March 2022, the capital city average asking rents rose 0.5% for houses and 0.4% for units, with asking rents for houses at $627 per week and $447 for units, respectively.

Perth, Brisbane, and Canberra recorded the biggest increase in the house asking rents over the month, while Melbourne and Sydney house rents were steady.

Over the year, the capital city asking rents surged by 9.4% on a combined dwelling basis.

Rents rose by 14.0% for houses and 8.5% for units.

Given a dramatic tightening in vacancy rates, we are seeing an ongoing acceleration in weekly market rents across the capital cities.

This situation now represents a significant rental crisis across the country.

The flooding may exacerbate the shortage of rental accommodation in NSW and Queensland in the coming weeks.

And the new surge in international students and other overseas arrivals will continue to create shortages in our inner-city regions.

Overall, it is likely vacancy rates will fall again over March as the first week recorded yet another decline in rental accommodation listings. Western Australia And Northern Territory

Some slight relief may be at hand as the current seasonal tightening we have seen at this time of year generally comes to an end over April.

All the same, we can expect capital city rents to rise by over 10% in 2022.

As it stands, the current rent rises represent the largest increase since the 1970s and so there are major terms ramifications for inflation.

Housing is the highest weighted group in the CPI, accounting for around 23% of the basket.

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.
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