Vacancy Rates continue to Rise in Melbourne and Sydney

The national residential rental vacancy rate has recorded a minor decrease over the month from 2.6% in April to 2.5% in May 2020, with the total number of vacancies Australia-wide now at 86,398 vacant residential properties. Buy Home In Australia

However, the largest rental markets of Sydney and Melbourne recorded rises in rental vacancies.

Sydney rose to 4.0%, making it the highest vacancy rate in the country.

Melbourne’s vacancy rate had the highest percentage increase of 0.3% to record a 3.1% vacancy rate.

Adelaide and Hobart both have the lowest vacancy rate in May at 1.2% each.

The year on year comparison reveals unseasonal rises when the national rental vacancy rate in May 2019 was 2.2% compared to 2.5% recorded for May 2020.

Only Perth and Darwin recorded lower vacancy rates compared to this time last year.

City May 2019 Vacancies May 2019
Vacancy Rate
April 2020 Vacancies April 2020
Vacancy Rate
May 2020 Vacancies May 2020
Vacancy Rate
Sydney 23,796 3.3% 28,734 3.9% 29,416 4.0%
Melbourne 10,349 1.8% 16,575 2.8% 18,499 3.1%
Brisbane 8,133 2.4% 9,555 2.8% 8,780 2.5%
Perth 6,457 3.1% 4,807 2.3% 4,167 2.0%
Adelaide 2,126 1.1% 2,398 1.2% 2,293 1.2%
Canberra 785 1.2% 824 1.2% 880 1.3%
Darwin 1,038 3.3% 837 2.6% 727 2.3%
Hobart 143 0.5% 442 1.4% 386 1.2%
National 75,083 2.2% 88,668 2.6% 86,398 2.5%

Key Points

  • The National residential rental vacancy rate recorded a decrease over the month from 6% in April to 2.5% in May 2020, with total number of vacancies Australia-wide now at 86,398 vacant properties.
  • Sydney and Melbourne continue to record declines in asking rents for both houses and units over the month. Whilst Brisbane, Perth and Darwin bucked the trend to record increases in both house and unit asking rents.
  • Over the month, Capital city asking rents increased 2% for houses but declined 0.7% for units for the week ending 12 June 2020 to record asking rents of $538 per week for houses and $425 per week for units.
  • CBD and holiday locations continued to be the hardest hit areas.

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.

Among the capital city CBD locations, Sydney CBD continues to blow out, now 16.2% in May, up from 13.8% in April.

Melbourne and Brisbane CBD are also up, now recording 9.3% and 13.3% vacancy rates in May respectively.

Melbourne Southbank has risen to 16.8% and Sydney’s Palm Beach is now 16.7%.

Capital City CBD Vacancy Rates:

Postcode Suburb May 2020

Vacancy Rate

May 2019 Vacancy Rate
2000 Sydney CBD 16.2% 8.1%
4000 Brisbane CBD 13.3% 4.5%
3000 Melbourne CBD 9.3% 2.2%
5000 Adelaide CBD 7.8% 2.6%
2601 Canberra CBD 7.7% 3.5%
6000 Perth CBD 6.0% 6.0%
0800 Darwin CBD 5.0% 6.3%
7000 Hobart CBD 2.7% 0.9%

Rental listings fell in first week of June

Total rental listings appear to have peaked for now with 98,061 listings recorded on the 9th of June verses 105,277 listings recorded on the 9th of May.

There were 95,085 rental listings recorded on the 9th of June 2019. The data would suggest that vacancy rates may drop for June 2020.

Asking Rents

Over the month, Capital city asking rents increased 0.2% for houses but declined 0.7% for units for the week ending 12 June 2020 to record asking rents of $538 per week for houses and $425 per week for units. Rent

Sydney and Melbourne continue to record declines in asking rents for both houses and units over the month.

Whilst Brisbane, Perth and Darwin bucked the trend to record increases in house and unit asking rents.

Canberra recorded a 1.0% decline in house asking rents but remained stable for units.

Adelaide and Hobart both recorded decreases in unit asking rents of 0.2% and 4.6% respectively but house rents increased 0.9% and 0.6% respectively.

SQM Research Weekly Rents Index
Week ending: 12 Jun 2020 Rent Change on
previous week
Rolling month
% change
12 month
% change
Sydney All Houses 641.5 -1.5 -1.0% -6.9%
All Units 476.5 -1.5 -0.8% -5.2%
Melbourne All Houses 532.7 0.3 -0.4% -1.4%
All Units 404.9 -0.9 -0.5% -4.5%
Brisbane All Houses 462.3 1.7 1.1% 0.6%
All Units 377.9 0.1 0.2% 1.6%
Perth All Houses 450.1 -0.1 0.6% 0.3%
All Units 349.5 1.5 1.5% 3.9%
Adelaide All Houses 411.5 2.5 0.9% 4.0%
All Units 316.9 1.1 -0.2% 2.7%
Canberra All Houses 621.8 -2.8 -1.0% 0.6%
All Units 466.9 1.1 0.0% 0.9%
Darwin All Houses 485.7 -6.7 1.2% -5.3%
All Units 354.5 0.5 0.1% -4.4%
Hobart All Houses 433.5 2.5 0.6% -0.4%
All Units 378.1 -18.1 -4.6% -2.7%
National All Houses 443.0 -2.0 0.7% 0.5%
All Units 373.0 5.0 1.9% 0.8%
Cap City Average All Houses 538.0 1.0 0.2% -2.7%
All Units 425.0 -1.0 -0.7% -3.6%

Source: www.sqmresearch.com.au

Commentary

After the results for May, we may now be hitting a short-term peak in vacancies.

Weekly rental listings suggest a slight decline in supply for the first half of June. For Rent

I think what is happening here is Airbnb property owners have now pulled back from listing long term and are now waiting this time out in the hope that the borders will be open shortly.

However, with an expected 170,000 dwelling completions for this year and still no imminent opening of the international border, I still think rental vacancy rates are going to remain elevated for 2020.

While First Home buyer grants may assist in soaking up some of the new supply, lets just remember the bulk of underlying demand growth in recent years has come from net migration.

Also note that many First Home Buyers are tenants.

icon-podcast-large

Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


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


'Vacancy Rates continue to Rise in Melbourne and Sydney' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts