SQM Research has released its rental vacancies report for the month of December, which registered a big increase in the vacancy rate to 2.6% nationally, from 2.2% in the prior month and 2.3% in December 2012:
Part of the increase in the vacancy rate in December relates to seasonality, with vacancy rates typically rising at this time of year, although vacancies have clearly risen materially over the year, particularly in Perth, Brisbane and Canberra.
According to SQM Research:
Melbourne’s 3.4% vacancy rate for December marks the fifth consecutive increase in vacancies for this capital city and is now sitting above what SQM Research considers to be market equilibrium which is 3.0%.
Of particular significance are now ongoing uptrends in a number of the capital cities’ CBD location. Vacancy rates for example in Brisbane’s CBD are currently sitting at 5.4%, Melbourne’s CBD at 5.8% and Perth’s CBD at 5.9%. In all three CBD locations, vacancy rates have surged from mid-2013 onwards.
The elevated vacancy rates are predominantly due to new supply on the market in these inner city localities and can explain some of the surges in vacancies for these cities.
As also previously reported, SQM Research has recorded some extremely high vacancy rates for a number of resources based townships. In particular:
• Karratha – 8.0%
• Port Hedland – 6.3%
• Gladstone – 11.1%
• Mackay – 6.8%
• Townsville – 8.0%
SQM Research’s Asking Rents Index revealed that asking prices for rental properties remained flat during 2013, with the capital city average recording a mere 0.8% increase in asking rents for houses and a 1% increase in asking rents for units.
The clear outperformer of the capital cities over the year was Darwin with a 5.9% increase in asking rents for houses and a 7.7% increase in asking rents for units. Canberra however, recorded the steepest declines with an -8.4% decrease in asking rents for houses and a -5.3% decrease in asking rents for units.