National Rental Market

Figures released by SQM Research this week have revealed the number of residential vacancies nationally has remained tight during March, recording a vacancy rate of 2.3%, and 70,493 vacancies. Year-on-year results demonstrate that national vacancies appear to be slightly above the common seasonal trends expected at this time of year.

City

March 2015 Vacancies

Vacancy Rate

February 2016 Vacancies

Vacancy Rate

March 2016 Vacancies

Vacancy Rate

Adelaide

2,394

1.4%

3,168

1.9%

3,155

1.9%

Perth

5,295

2.7%

7,819

3.9%

8,244

4.1%

Melbourne

9,644

2.1%

9,683

2.0%

9,173

1.9%

Brisbane

6,714

2.1%

8,137

2.5%

8,254

2.6%

Canberra

832

1.5%

715

1.3%

627

1.1%

Sydney

9,219

1.6%

9,594

1.6%

9,424

1.6%

Darwin

935

3.4%

1,011

3.6%

1,020

3.6%

Hobart

376

1.4%

239

0.9%

236

0.9%

National

63,906

2.1%

70,161

2.3%

70,493

2.3%

 

Canberra recorded the largest monthly fall, with vacancies down 0.2 percentage points during the month of March. Melbourne also experience a monthly fall, with percentage points down 0.1% over the month of March have a vacancy rate of just 1.9%. In contrast, Perth and Brisbane recorded a rise in vacancies during the month of March, with vacancies up 0.2 percentage points for Perth. Despite this, Perth, and to a lesser extent Darwin, continue to record an alarming number of vacancies, particularly when you consider the number of vacancies recorded this time last year (March 2015).

 

March results for Sydney, Adelaide, Darwin and Hobart remained the same over the month of March. Once again, Hobart revealed the tightest rental market recording a vacancy rate of just 0.9% based on just 236 vacancies. 

Asking rents

Notably, according to SQM Research, Darwin has recorded ongoing falls in asking rents of 9.7% for houses and 10.6% for units over the past 12 months. Yearly falls have also been recorded in Perth, with asking rents down 8.9% for houses and a considerable 9.0% for units. Hobart continues to record the most affordable rental accommodation with rents for houses at just $345 a week, while units on average rent for $276 a week.

Overall national vacancy rates remain steady however there is some contrast in the market place and current misperceptions over areas of oversupply. Right now the data suggests the areas of oversupply are confined to Perth, Darwin and the Brisbane CBD. Other bodies have suggested Melbourne should be classified as oversupplied. On this point, SQM's data suggests otherwise. Vacancies rates for Melbourne have actually been in a downtrend now since 2014 and are now below 2%. Even in localities well known for elevated vacancies, such as the CBD, Docklands and Southbank, SQM's numbers suggest vacancies have actually been falling in these specific localities. They have now fallen to levels below their long term average and certainly below levels that they were publicly concerned about, but no longer are as concerned.

After being as high as 6.1% in 2014, SQM Research reports the Melbourne CBD is now recording a vacancy rate of 1.9%. Southbank was at 5.6% in March 2014. It is now at 3.7%. Docklands vacancy was at 5.8% in March 2014. It is now 2.9%.

Key Points

  • Nationally, vacancies remained tight during March 2016, recording a rate of 2.3%, based on 70,493 vacancies.
  • Perth recorded the highest vacancy rate in March 2016 of 4.1% based on 8,224 vacancies.
  • Vacancy rates in Sydney, Adelaide, Darwin and Hobart remained the same over the month of March 2016.
  • Year-on-year, vacancy rates dropped in Melbourne, Canberra and Hobart.
  • Hobart recorded the lowest vacancy rate during March 2016 - 0.9% based on 236 vacancies.
  • Over the past 12 months, Darwin asking rents have experienced excessive yearly falls with houses down 9.7% and a 10.6% decrease for units.