According to SQM, there is now the likelihood that rental growth nationally will slow to a crawl:
Of particular note is Melbourne’s June result, which has crept up closer to 3% again, after four consecutive months of vacancies recorded well under this figure.
With Darwin and Hobart the only two capital cities to experience monthly decreases in vacancies, the remainder of the country’s capital cities either stagnated or recorded increases during June 2013. Canberra in particular recorded a 2% monthly rise and a staggering 0.9% yearly rise.
Also of interest is Perth’s result – recording a vacancy rate of 1.5% in June which represents a yearly increase of 0.8%. SQM Research regards Perth’s recent loosening in the rental market as a side effect of the slowdown in Australia’s commodities boom, as many of the nation’s mining towns are located in that part of the country.
Louis Christopher, Managing Director of SQM Research says, “As stated with May’s result, it has become apparent that vacancy rates are now rising. Causations behind the rise vary from city to city. For example the rises in Melbourne and Canberra are as a direct result of rises in completions of new residential dwellings throughout 2012 and early 2013. The rises in Perth appear to be more demand related.
“The net result out of this is that rents will struggle to rise for the remainder of this year and 2014 could see zero rental growth as an average for the capital cities. Indeed, we have evidence rents are already falling in at least one city, being Canberra.”
