Originally posted on www.domain.com.au by Eliza Owen
Sydney’s rental vacancy rate remains the second-highest of the capital cities, behind Darwin, as dwelling unit completions and investment stock remain elevated.
There were approximately 18,000 vacant rentals across Sydney at the end of October. About 750 of these were spread across the suburbs of Sydney, Parramatta and Liverpool.
The elevated vacancy rate across Sydney continues to put downward pressure on rents, and may explain why investor activity has been slower to pick up across NSW.
The vacancy rate was also steady in Melbourne, at 1.8 per cent. Melbourne has one of the lowest vacancy rates due to strong population growth, particularly among renting households. Implementing property management best practices can help landlords navigate the challenges posed by fluctuating vacancy rates and ensure optimal performance of their rental properties.
Domain data shows that while the number of vacant rentals has increased 28 per cent across Melbourne over the year, online email inquiries for rentals to Melbourne climbed 17.2 per cent. This suggests that strong demand for rentals is partially keeping up with new dwellings supplied.
The Hobart market continues to have a rental availability crisis, with the vacancy rate falling 20 basis points in October. At the end of the month there were an estimated 101 rental properties available across Hobart.
The tight rental market in Hobart is also reflected in extraordinary rent increases. Median asking rents for houses increased 10 per cent in the year to September, while the median unit rent increased 13 per cent.
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| Rental Vacancy Rates Australia | |||||
| Oct 2019 | Sep 2019 | Oct 2018 | MoM ∆ | YoY ∆ | |
| National | 1.9% | 1.9% | 1.9% | – | – |
| Sydney | 2.9% | 2.9% | 2.5% | – | ↑ |
| Melbourne | 1.8% | 1.8% | 1.4% | – | ↑ |
| Brisbane | 2.3% | 2.2% | 2.6% | ↑ | ↓ |
| Perth | 2.4% | 2.6% | 3.2% | ↓ | ↓ |
| Adelaide | 0.8% | 0.8% | 1.0% | – | ↓ |
| Hobart | 0.4% | 0.5% | 0.2% | ↓ | ↑ |
| ACT | 1.0% | 1.1% | 0.6% | ↓ | ↑ |
| Darwin | 3.6% | 3.4% | 4.7% | ↑ | ↓ |
Source: Domain
The vacancy rate represents the portion of available, empty rental properties relative to the total stock of rental property. The rental vacancy rate is based on adjusted Domain rental listings and will be subject to slight revisions over time.
Perth landlords have more reasons to celebrate in October, with the biggest drop in the vacancy rate of the capital city markets over the month.
The Perth vacancy rate at the end of October was 2.4 per cent, 20 basis points lower than in the previous month. This means options for tenants are gradually shrinking, empowering landlords to lift rents.
In fact, the latest Domain rent report shows they have been doing just that. The September rent report saw median weekly asking rents increase 5.7 per cent over the year for houses, and 3.3 per cent in units.
On the other hand, The national rental vacancy rate remained stable at 1.9 percent in September, mirroring the trend in most capital city markets, with five cities experiencing no change in vacancy rates during the same period.
But part of the reason behind such strong increases in asking rents, and such a steep decline in the rental vacancy rate, is that Perth is still a renters’ market. Perth has the third-highest vacancy rate of the capital city markets, and the lowest asking rents. In other words, even though rent prices have improved from the landlords’ perspective, they have a long way to go.