Australia’s vacancy rates held steady in June despite marginal increases in some capital cities, which could be a sign that the market could reach its peak soon.

SQM Research’s latest report found that the national vacancy level was at 1.0% in June, maintaining the rate from May. Over the same month last year, the vacancy rate was at 1.7%. 

Overall, there were 37,049 vacant rental properties in June, slightly up from 36,478 in May and significantly down from 60,468 last year — this reflects the tight market conditions on the side of tenants.

Despite the steady headline vacancy rate, some capital cities reported a slight increase in vacancy rates monthly, including Sydney (1.5% to 1.6%), Adelaide (0.3% to 0.4%), Canberra (0.7% to 0.8%), and Hobart (0.4% to 0.6%).  

Brisbane is the only capital city to record a decline in its vacancy rate from 0.7% to 0.6%. The city has also experienced the highest annual increase of all capital cities in rental prices for both houses and apartments, according to Domain's quarterly Rent Report. 

In terms of the volume of available rental properties, Adelaide, Canberra, and Hobart all registered an increase over the month. 

Rental crisis nearing its peak

SQM Research managing director Louis Christopher said the rental market continues to significantly favour landlords as vacancies remain tight. 

“However, there are now signs of a peak in the rental market in regional Australia with a larger number of regions now recording rising rental vacancy rates and some falls in rents,” he said. 

Asking rents across regional markets declined by 1% over the 30 days to 14 July, led by the declines in NSW North Coast (2.6%), NSW Central Coast (down 1.9%), Launceston (down 1.8%), Bellarine Peninsula (down 1.0%), Gippsland (down 1.2%), South Western Victoria (down 2.6%). 

Meanwhile, tenants in capital cities paid 1.8% more in rent during the same period.  

“While capital city rents continue to march higher, it’s possible we could be near the peak in the national rental crisis — outside Brisbane, there was no material decrease in rental vacancy rates over June.” 

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