Rents to rise as vacancy rates fall
Vacancy rates across Australia’s capitals have tumbled, with upward pressure on rents a likely result.
Figures from SQM Research show the vacancy rate in March fell to just 1.5% in Melbourne, down from 2.0% the previous month. Vacancies in Sydney were down from 1.9% in February to 1.7% in March.
The national vacancy rate edged down from 2.4% in February to 2.3% in March. Hobart remained the nation’s tightest rental market, with a vacancy rate of just 0.6%, down from 0.7% the previous month. Canberra’s vacancy rate was also low, down from 0.9% in February to 0.8% in March.
Vacancies fell in every capital city, even edging down in Perth and Darwin. SQM Research managing director Louis Christopher said the tightening of vacancy rates reflected a seasonal shift as people return to their jobs after summer break and students return to university.
"Significantly, the vacancy rate continued to fall in Melbourne despite predictions of apartment oversupply. Even in the spots where we would have expected to see oversupply, such as Docklands and Southbank, we are not seeing it, where there are thousands of apartments, new and old," he said.
Vacancies also fell in Sydney, despite high levels of apartment construction. Christopher said the lower level of vacancies put pressure on asking rents.
"Reflecting its lower vacancy rate, asking rents rose in Melbourne over the month to April 12, up by 1.6% for units and 0.7% for houses. Annually, asking rents for houses is growing fastest in Melbourne at 7.1%, reflecting tightening vacancy rates. Sydney unit rents too jumped by 1.6% over the month, as well as a 1.5% rise for Canberra units, though housing rents fell in those two cities," he said.