Landlords may need to rein in their rental expectations with new data indicating that the rental market continues to slow.
SQM Research’s latest Asking Rents Index
reveals that there has not been a substantial increase [in rents] when compared to the same period in 2013.
and Sydney were the only two capital cities to record substantial increases in asking rents since July 2013.
In fact, Perth
and Canberra both recorded considerable decreases over the same period.
The data does show a slight decrease in the national vacancy rate over July, which leaves the vacancy rate steady at 2.3% nationally.
However, SQM’s report makes it clear that there is a longer term trend of higher vacancy levels around the country, despite a minor dip in listings.
The report notes that this indicated an increase of supply in the rental market which, in turn, meant a shifting balance of power from landlords to tenants.
SQM’s managing director Louis Christopher said that, overall, the rental market was sluggish with asking rents showing rises of just 1.2% to 1.7% at the average capital city level.
“Perth rents have dragged down the overall result. It’s quite clear rents in Western Australia are falling quickly.”
Each capital city continued to tell its own unique story, he added.
- Darwin recorded the tightest vacancy rate of the capital cities, with a vacancy rate of 1.4%. However, that was an increase from 0.8% in July 2013.
- Perth recorded the highest yearly increase in vacancies. It climbed to 2.5%, since July 2013 when it was 1.6%.
- Melbourne recorded the highest vacancy rate of the capital cities, revealing a vacancy rate of 2.6%. However, this was identical to its July 2013 rate.
- Hobart recorded the largest yearly decrease in vacancies. It fell to 1.7% from 2.3% in July 2013.
- No capital cities’ vacancy rates increased on a monthly basis, but Perth remained unchanged at 2.6%.
- Canberra and Darwin recorded the largest monthly decline in vacancy rates. They dropped 0.2 of a percentage point to 2.1% and 1.4% respectively during July 2014.
Christopher said that vacancy rates were likely to rise from these levels.
“Therefore we are expecting a soft rental market for quite some time and certainly well into 2015.”
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