While Sydney’s rental vacancy rates are a concern for Australia’s property market as they hit a 13 year high, other cities are reaping the benefits as investors look elsewhere to explore other opportunities.
According to news.com.au, a recent SQM Research report on rental vacancy rates suggests that the investment heydays of New South Wales’ capital are well over, and it is time may be right to look into Brisbane and Perth, where vacancy rates are trending the right direction.
“The relative direction the rates are moving is as important, if not more so than the rates themselves,” SQM Research Managing Director Louis Christopher said.
At present, Brisbane’s vacancy rate is still higher than Sydney’s at 3%, but the market is showing signs of improvement, down from 3.6% year-on-year. For reference, the national vacancy rate for capital cities was 2.3% in June 2017, and markets with vacancy rates between 2 and 3% are considered steady.
“Affordability [in Brisbane] is quite good, vacancy rates in our view have peaked and there are more renters coming from Sydney, which is showing up in the interstate migration data,” Christopher noted.
In addition, Brisbane’s job market has been growing, bringing in an influx of new renters. This coincides with the data from PRDnationwide’s Affordable Property Guides, which named the Queensland’s capital the most affordable and liveable city, thanks to its slow growth in prices and rent.
PRDnationwide national research manager Dr. Diaswati Mardiasmo also noted the shift in property trends.
Perth, now enjoying a 4.1% vacancy rate – down from 5.4% at the same time last year – is also considered a potential target market for investment.
“Property is a long-term play… investors need a 10-year outlook, not two years,” Christopher concluded. “You need to pay a price that reflects the current state of the market.”
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