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.
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
|April 2020 Vacancies||April 2020
|May 2020 Vacancies||May 2020
- 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.
Capital City CBD Vacancy Rates:
|May 2019 Vacancy Rate|
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.
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.
Canberra recorded a 1.0% decline in house asking rents but remained stable for units.
|SQM Research Weekly Rents Index|
|Week ending: 12 Jun 2020||Rent||Change on
|Cap City Average||All Houses||538.0||1.0||0.2%||-2.7%|
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.
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.
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