National residential rental vacancies fell in August, according to data released by SQM Research this week. The exact figure for the month was 71,540 homes, or 2.2%, down from 2.3% in July.
The vacancy rate was notably tight in Hobart at 0.4%, down from 0.5% a month before – a record low for any capital city since SQM Research began measuring the rental market in 2005.
In Sydney and Melbourne, vacancies remained steady at 2% and 1.7% respectively. All other cities recorded drops in vacancies for the month. While Sydney recorded a rise in vacancies over the winter months, SQM expects this seasonal increase to unwind during spring.
Darwin recorded the steepest decline for the month, with vacancy rates falling to 2.5%, from 2.9% in July. The city has recorded falling vacancy rates for seven consecutive months in a row, suggesting the downturn in the Darwin rental market has come to a halt.
Brisbane had a vacancy rate of 3.1% for August, down from 3.3% in July, while Perth continues to have the highest vacancy rate of all the capital cities at 4.6%; nevertheless, this was a slight drop from 4.9% in July.
“Overall the current rental market is a moderate landlord’s market. There is nothing in our numbers to suggest the market is about to be hit with oversupply,” said Louis Christopher, managing director of SQM Research.
“Dwelling completions should peak in early 2018 and given the pronounced year-on-year declines in building approvals, we believe rents will likely rise at a faster pace in 2018 than what has been recorded in 2017, thus far. We now have mounting concerns for significant rental shortages in 2019 in Sydney and Melbourne”.
Hobart breaks an all-time record
As has already been mentioned, Hobart’s vacancy rate for August was lower than any capital city for as long as SQM Research has been keeping records. The city is poised to experience price growth that is larger than anything witnessed in Sydney, according to Propertyology, a national property market researcher and buyer’s agency.
“This is yet another piece of positive data to add to the long list records which Hobart has achieved over the last couple of years,” said Simon Pressley, head of property market research at Propertyology. “Employment growth, retail spending, interstate migration, job advertisements, domestic and international visitor numbers, vacancy rates, Australia’s strongest property market, the list keeps growing.”
“There’s no such thing as an empty property in Hobart right now. If a tenant of a property indicates that they are not renewing their lease at the end of the term the property manager will have a long list of waiting applicants,” Pressley said.
“The typical three-bedroom house in Hobart currently rents for $360 to $450 per week, which is significantly more affordable than most parts of Australia so there’s still plenty of scope for rents to increase.”
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