Rental vacancies still shrinking, now at lowest since 2006

SQM Research’s latest report shows further proof that Australia’s rental market is in crisis — vacancy rates have fallen to the lowest level since 2006.

The rental vacancy rate across Australia dropped to 0.9% in August, which is already at an unprecedented territory given the sustained lack of properties over the past six months and the geographical extent of the crisis.

Over the month, vacancy rates across cities and regions either remained flat or declined.

Adelaide reported the lowest vacancy rate among capital cities at 0.3%, followed by Perth (0.4%) and Hobart (0.5%).

Overall, the number of rental vacancies across Australia stood at 32,948, down from the previous month’s 36,741.

The difference is even bigger from during the same month last year, when vacancies were at 58,856 at a vacancy rate of 1.6%.

SQM Research managing director Louis Christopher said the results in August is evidence to the further deterioration of the rental market to unprecedented levels.

“Rental listings thus far recorded in September would suggest another fall in rental vacancy rates for the current month,” he said.

“I note the recent alerts and warnings issued by the various housing bodies as to what is happening on the ground and our data would concur with such concerning reports.”

Due to the rising vacancy rates, rents also increased — over the past 30 days to 13 September, asking rents across capital cities increased 2.6%.

On an annual basis, asking rents have already increased by 20.1% across capital cities.

“Asking rents continue to rise across the country at a red-hot pace. All capital cities are recording double digit percentage rental increases over the past 12 months,” Mr Christopher said.

A separate report from Domain Research released last week showed a similar story on vacancy rates.

According to Domain, the supply and demand issues highlight the need to address the rental crisis, especially with the expected return of overseas migrants and international students that may further put pressure on demand.

“It is expected that rental conditions will stabilise with the broader slowdown in the housing market, cooler purchasing conditions, and the introduction of new first-home buyer incentives helping current tenants eventually transition to home ownership and therefore remove an element of rental demand,” Domain said.

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