As shown above, the commodities bust continues to weigh heavily on both Perth and Darwin, with vacancy rates jumping by 1.3% and 0.4% respectively over the year. Brisbane, too, is experiencing rising rental vacancies (up 0.3% YoY to 2.5%).

By contrast, the bubble epicentres of Sydney (1.6% – down 0.1% YoY) and Melbourne (2.0% – down 0.3% YoY) remain relatively tight, as do Adelaide (1.9% – up 0.4% YoY), Canberra (1.3% – down 0.3% YoY), and Hobart (0.9% – down 0.4% YoY).

SQM Research also released its asking rents data for the week ended 12 March 2016, which again recorded steep annual falls in rents in Darwin and Perth, which have held down asking rents nationally:

According to SQM Research’s managing director, Louis Christopher:

“Overall, there was a noticeable fall in vacancies for the month driven by Melbourne and Sydney. However, year on year vacancies are still edging up for the country and we think this will still be the trend going forward. The cities and townships most exposed to the commodities downturn are causing this yearly rise. On the flip side Melbourne, Hobart and Canberra are all recording downward trends in vacancies now and this is resulting in upward pressure in rents for these three cities.”

With ongoing strong dwelling construction in the face of falling population growth, it’s only a matter of time before the rental vacancy rate nationally breaks above the GFC high. In turn, actual rental growth – which was zero in the year to February, according to RP Data – should remain under pressure.

unconventionaleconomist@hotmail.com

Rental vacancy rate retraces in February