Renters could face tough market in future
Sydney and Melbourne could face a rental crisis in the years ahead as vacancy rates dwindle.
New figures from SQM Research show the national vacancy rate fell in August to 2.2%, down from 2.3% in July.
The rental market remained tightest in Hobart with a vacancy rate of just 0.4%. This was down from 0.5% the previous month.
Perth was the nation’s weakest rental market with a vacancy rate of 4.6%. However, this was an improvement on July’s result of 4.9%. Darwin has also seen vacancies decline, suggesting the downturn for the city’s rental market may have halted. Vacancies in Darwin fell from 2.9% in July to 2.5% in August.
Sydney and Melbourne vacancies remained steady. But SQM Research managing director, Louis Christopher, said signs pointed to a severe undersupply for the cities in the near future.
“There is nothing in our numbers to suggest the market is about to be hit with oversupply. Dwelling completions should peak in early 2018 and given the pronounced year on year declines in building approvals, we believe rents will likely rise at a faster pace 2018 than what has been recorded in 2017, thus far. We now have mounting concerns for significant rental shortages in 2019 in Sydney and Melbourne,” Christopher said.