At the national level, rental vacancies jumped by 0.3% in April to 2.3%, with vacancies also tracking 0.3% above the same time last year.
This is the highest vacancy rate result for April that SQM Research has ever recorded since the index commenced in 2005.
As you can see above, the jump in vacancies nationally has been driven by sharp rises in Perth (+1.1% YoY), Brisbane (+0.5% YoY), Canberra (+1.0% YoY), and Darwin (+0.6% YoY), with the other capitals either flat or falling.
In a similar vein, SQM Research has also recorded subdued growth in the nation’s asking rents, which rose by only 1.5% (houses) and 1.7% (units) over the past 12 months to May at the combined capital city level:
SQM Research’s Gross Implied Rental Yield has also fallen significantly on the back of rising property prices and soft rental growth, with the capital city average rental yield falling 0.3% from 4.0% in May 2013 to 3.7% in May 2014.
According to SQM managing director, Louis Christopher:
“As we predicted this time last year, rental growth is slowing to the point where we are recording a flat rental market and in some instances significant rental falls as is the case with Perth and Canberra. With the national recovery in building approvals and completions, I can only surmise that the rental market is increasingly going to favour tenants over the next 12 months. And so rental yields for potential property investors will look even less attractive from their current low levels.”
All of which adds to the case that now is not the time to be leveraging-up into investment property.
