Vacancy rates highest in Perth, Brisbane

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Vacancy rates in Brisbane jumped ahead of Darwin in September rising to 2.6%, according to the latest rental report by Domain Group. Unit vacancy rates also climbed to 3.2% from 3% year-on-year.

However, Brisbane’s vacancy rate is still a far cry from Perth, which is at 4.2%. Darwin’s vacancy rate tightened to 2.1%, making it the third highest in the country.

“The upward bias of vacancy rates is really favouring tenants,” said Andrew Wilson, chief economist of Domain Group.

“When compared to other capital cities, it’s clearly become one of the best cities for renters in the country.”

Wilson attributed the rise of unit vacancy rates to higher supply than demand. Though median rent prices remained flat at $400 per week, this is a good sign as this means there are now more first home buyers in Brisbane.

“Brisbane has seen higher numbers of first home buyers and that has really taken pressure off rental demand,” said Wilson.

“Rents have been flat for some time now, and will likely continue into the foreseeable future. But yields are high in Brisbane – in fact, highest of the mainland, which is attractive to investors. However, the issue is securing a tenant, and that’s the challenge.”

But for Real Estate Institute of Queensland spokeswoman Felicity Moore, unit rents will likely drop in the near future.

“At this stage there is no data to suggest we’re facing a major downturn. However, we expect that with a strong level of supply still slated to come online over the next 12 months, there will be a short-term softening of the market – rents and unit prices will fractionally slide before recovering in late 2018,” she said.
 

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