There appears to be no relief in sight for renters in Australia as rental vacancy rates continue to fall, indicating a rapid market tightening.
According to PropTrack, rental vacancy rates across Australia went down to 1.47% in February, almost half the level seen before the pandemic and the lowest level since late 2018.
Over the month, there was a demand shift to the capital cities — it is now harder to find a rental property in state capitals than their regional counterparts for the first time since the pandemic started.
|
Rental Vacancy Rates – February 2023 |
||||
|
Area |
Vacancy Rate (%) |
Change |
||
|
Monthly (percentage points) |
Annual (percentage points) |
Since March 2020 |
||
|
National |
1.47 |
-0.10 |
-0.57 |
-52% |
|
Capital Cities |
1.43 |
-0.14 |
-0.93 |
-55% |
|
Regional Areas |
1.58 |
-0.02 |
-0.33 |
-41% |
|
Sydney |
1.70 |
-0.18 |
-1.04 |
-59% |
|
Melbourne |
1.71 |
-0.21 |
-1.76 |
-52% |
|
Brisbane |
1.30 |
-0.07 |
-0.51 |
-55% |
|
Adelaide |
0.92 |
-0.05 |
+0.05 |
-45% |
|
Perth |
0.85 |
-0.07 |
-0.34 |
-69% |
|
Hobart |
1.28 |
+0.06 |
+0.49 |
-31% |
|
Darwin |
2.53 |
-0.27 |
+0.41 |
-50% |
|
ACT |
2.09 |
+0.02 |
+1.08 |
-74% |
Among capital cities, Adelaide and Perth had the tightest rental conditions in February as their vacancy rates sat below 1%.
Meanwhile, Sydney and Melbourne seemed to have started regaining the demand they lost at the height of the pandemic. Over the year, the two reported the biggest drops in vacancy rates among all capital cities.
Regional markets remained competitive for renters — all rest of state markets, except Northern Territory, reported vacancy rates of below 2%.
PropTrack senior economist Paul Ryan said the lack of available supply in rental markets will drive rapid rent price increases over the rest of the year.
“With demand for rentals expected to remain strong, we see no reprieve for tenants in the coming months. These rental market conditions mean rent prices will continue to grow strongly throughout 2023,” he said.
“The financial pressure renters across the country are already feeling will be exacerbated over the remainder of 2023.”
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Photo by Karolina Grabowska from Pexels.
