Rental vacancy rate falls in August

By Leith van Onselen

SQM Research today released rental vacancy rates for the month of August. Below is the media release:

Figures released this week by property research house – SQM Research reveal that the level of residential vacancies fell slightly once again during the month of August, dipping by 0.1% to 1.8% on a national level and coming to a total of 50,774 vacancies. This figure represents a decline of 2,127 vacancies month-on-month and is the third monthly dip in vacancies.

With Canberra and Darwin being the only capital cities to record monthly increases, the majority of capital cities either stagnated during August or experienced modest declines.

Darwin, although loosening slightly month-on-month is still recording extremely low vacancies and with a current vacancy rate of 0.5% (total of 114 vacancies) it is fair to assume that the city is continuing to show all the symptoms of a severe rental crisis. However, it should be noted that vacancies are seasonally at a low point.

With every capital city around the country recording vacancy rates of under 3% (a figure which SQM Research regards as equilibrium), SQM Research still considers the current rental market to be predominantly in favour of landlords rather than tenants.

Managing Director of SQM Research, Louis Christopher says “We note observations elsewhere that rental listings themselves may have increased. However, from our calculations, the increased listings are being absorbed rather quickly and largely failing to make stay on the market beyond three weeks. However, one other observation made is that vacancies do appear to be rising in a number of prestige property locations and we think that this is because of the cancellation of certain “away-from-home accommodation allowances, which were used primarily by executives in prestige real estate.”

SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties. SQM considers this to be a superior methodology compared to using a potentially incomplete sample of agency surveys or merely relying on raw online listings advertised.

Please go to our methodology page below for more information on how SQM’s vacancies are compiled-

Key Points

  • Nationally, vacancies declined slightly during the month of August 2012, recording a national vacancy rate of 1.8% and a total of 50,774 vacancies.
  • Melbourne has recorded the highest vacancy rate of the capital cities, revealing a vacancy rate of 2.8% and a total of 11,702 vacancies.
  • Darwin has recorded the tightest vacancy rate of the capital cities, revealing a vacancy rate of 0.5% and a total of 114 vacancies.’
  • Hobart has recorded the highest yearly vacancy rate increase, rising by 1% to 2.7%, coming to a total of 730 vacancies.
  • Both Canberra and Darwin were the only capital cities to record monthly increase in vacancies, rising by 0.1% to 1.2% and 0.5% respectively.
  • All other capital cities either remained the same or experienced minor declines during August 2012.
Leith van Onselen

Comments

  1. Just moved rentals recently and I must admit I find the rate for Canberra slightly unbelievable.

    1. Half of the properties I visited I was the only person there.

    2. My old rental property went for $50 per week less than I was renting it for previously.

    3. The number of properties for rent on allhomes in just three postcodes in the Inner North is almost the same as the number given in the table above for the whole of Canberra. A quick calculation using the 2011 census and allhomes for my postcode of 2602 gives a rental vacancy rate of 5.5%.

    I predict carnage in Canberra if Abbott gets in!

  2. Confirmation on the Darwin data.

    In my block, 3 bedroom apartments which rented for $600 in April 2012 are now renting for $750. Both of them are now occupied by groups of high vis shirt Bogan’s who do nothing nothing but work and drink. Three day benders are not uncommon. The wear and tear on these apartments will be very expensive for the owners.

    Severe rental stress is the talk of the city and one of the reasons the unemployment rate is low. Darwin has more jobs than workers because the average worker can not afford to live here.
    (average = $60k or less)

  3. innocent bystanderMEMBER

    Perth at 0.6%, must be why the agent keeps churning out rent increase emails – I respond with property defect emails – still a stand off, think he will win tho 🙁

  4. Can someone explain to me why the ’empty for three weeks’ criteria makes sense? I have rented for twenty years and the properties I have rented have been vacant for at most one – week. The only properties that stick around for three weeks are the rubbish ones . . . is there a better way of measuring this, or does it really matter? Surely the rental rates achieved is a better measure of ‘the market’.

    • I assume that is an average figure, one which all the overpriced – slow to rent places in less desirable locations increase.

      I guess that we just have to accept LC’s interpretation of that being indicative of a tight market.

  5. Seeing lots of For lease signs on houses and flas in south Sydney, close to city for the first time and those signs are up for 2-3 weeks. Would have thought they go in 30 minutes.

  6. Our high rents and low vacancy rates indicate there is a severe shortage of housing available to many people who require housing.
    Idiot government allows in many immigrants whilst choking the supply of extra housing. Government creates an unresponsive housing market where an increase in demand results in much higher prices and many families missing-out. By contrast a responsive housing market would result in many extra houses produced at similar cost to previous.
    An easy solution to this problem would be to limit NET immigration to zero with a “one-out-one-in” policy similar to what is used in a crowded nightclub. Each hopeful immigrant to Australia would have to wait in a queue until one person left Australia. The policy could be further enhanced by using age bands. For example if 2 children under 10 leave Australia then 2 children under 10 would be allow to enter Australia.
    The “one-out-one-in” policy could be dropped as soon as an ordinary house could rent for, say 25%, of an ordinary wage.