27/04/2012
The latest vacancy rate figures suggest that some of our cities are facing extreme shortages of rental properties. In other cities, however, it looks as if renters may start to get an upper hand.
The overall rental situation looks healthy for landlords, according to March residential vacancy rate figures from SQM Research, with the average vacancy rate across all capital cities remaining at February’s level of 1.7%.
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Source: SQM Research
Looking more closely at the city by city figures, however, SQM Research managing director Louis Christopher noted that Perth is the clear frontrunner among landlords thanks to its super tight 0.5% vacancy rate.
"Perth is now an area of major concern with vacancies sitting at an incredibly low 0.5%. This is consistent with evidence from other researchers reporting rapidly rising rents,” he said.
“Vacancy rates for Perth have been falling consistently now since mid-2011. It seems with the housing downturn that has been going on over there since 2007, that not enough new stock has been built of late, and so given the still strong population growth, and that population easily finding jobs, Perth is getting some real demand pressure on rental properties.
“With those types of vacancy rates and no real significant increase in new stock coming to market, it’s going to be a fantastic landlord's market over there, with the one risk to this equation being a real hard landing in China.”
Darwin (0.6%) and Canberra (0.8%) also recorded vacancy rates of less than 1%, while Adelaide (1.4%), Sydney (1.5%) and Brisbane (1.5%) remain below the 2% mark. Melbourne saw a slight improvement, dropping from 3% in February to 2.9% in March, but still remains on the cusp of the 3% mark at which markets are considered to be balanced and no longer rather than in the favour of landlords.
It’s Hobart landlords, however, that Christopher believes should be most concerned by current vacancy trends. He noted that the Tasmanian capital sits at the other end of the spectrum to Perth in terms of rental supply and demand.
"Hobart on the other hand is beginning to show signs of the opposite extreme, with vacancies doubling since this time last year and many localities recording vacancy rates above 4%,” he said.
“We are also seeing rising stock levels in this area which, in contrast to other capital cities which seem to suffer from one or the other, reveals that Hobart is being hit with an oversupply issue from both sides."
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