Rental vacancies flat in February

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By Leith van Onselen

SQM Research has just released rental vacancy data for the month of February, which revealed no change in the rental vacancy rate over the month, but a slight fall in the overall number of rental vacancies. Over the year, however, the rental vacancy rate rose slightly to 1.9% nationally from 1.7% as at February 2012 (see below table).

From the Media Release:

February 2013 revealed some slight changes for most of the capital cities, particularly in the case of Melbourne which recorded a 0.3% drop in vacancies month on month – coming to a total of 11,410 vacancies and a vacancy rate of 2.7%. This is the lowest vacancy rate recorded for Melbourne for several months, however reveals no yearly change; thus SQM Research are yet to believe that the result for Melbourne is very telling at this stage.

Further to this, SQM Research’s new Weekly Rents Index has recorded a -0.8% year-on-year decrease in asking rental prices for Melbourne houses and only a 1.5% year-on-year increase in Melbourne units, revealing that the sentiment of landlords has for the most part not improved since February last year.

As a whole, the country appears to be have stagnated somewhat during February where the rental market is concerned. However, SQM Research believes that as the sales market continues to recover, vacancy rates will begin to rise further as potential buyers will leave the rental market to purchase their first homes.

Louis Christopher, Managing Director of SQM Research says, “Residential rental vacancy rates remained unchanged once again at a rate that is illustrative of a land lord’s market. While there should be a move of renters turning themselves into first home buyers this year, it does not seem to be at this stage a major shift.”

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 a superior methodology compared to using a potentially incomplete sample of agency surveys or merely relying on raw online listings advertised.

Key Points

  •  Nationally, vacancies remained the same, revealing a vacancy rate of 1.9% for the second consecutive month and coming to a total of 52, 351.
  • Melbourne has recorded the highest vacancy rate of the capital cities, revealing a vacancy rate of 2.7% and coming to a total of 11.410 vacancies.
  • Perth has recorded the tightest vacancy rate of the capital cities, revealing a vacancy rate of 0.9% and coming to a total of 1,678.
  • Canberra has recorded the largest yearly increase in vacancies, climbing by 0.7% to 1.2% since the corresponding period of the previous year (February 2012) and coming to a total of 627.
  • Hobart has recorded the most substantial yearly decrease in vacancies, falling by 0.3% to 2.1% since the corresponding period of the previous year (February 2012) and coming to a total of 583.
  • Hobart has recorded the highest monthly increase in vacancies, rising by 0.2% to 2.1% during February 2013.
  • Melbourne has recorded the largest monthly decrease in vacancies, falling by 0.3% to 2.7% during February 2013.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.