Vacant apartments tower over Melbourne and Sydney

Domain’s rental vacancy data for November shows that Sydney and Melbourne are experiencing very high vacancy rates:

SQM Research’s rental vacancy data shows similar trends:

According to SQM Research’s weekly rental listings data, this surge in vacancies across both cities has been driven entirely by apartments.

You can see from the next chart that detached house rental listings in Sydney are fairly tight (8,158), whereas there were a whopping 22,725 units available for rent as at 1 December:

In Melbourne, there were 8,922 detached houses available for rents versus a whopping 23,406 units available:

This gaping oversupply of apartments helps to explain why apartment rents have fallen so heavily across Melbourne and Sydney since the pandemic began in March and immigration flows stopped:

The rents situation is unlikely to turn around until immigration is rebooted.

Unconventional Economist
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Comments

  1. happy valleyMEMBER

    ” … around until immigration is rebooted”

    And DL-S’s Scotty The Impaler and Gladys The Grub presumably have that as their no. 1 priority, at all costs?

    • NoodlesRomanovMEMBER

      Well there is the vaccine that is 100% guaranteed to be 100% effective, so why not get things kick started ASAP?

      • happy valleyMEMBER

        It would be a relief if the local primary school stabilised its cohort at 75% asian, rather than trying to shoot the lights out for almost 100%, and moreover with the current cohort parents having contributed next to nothing to the expensive infrastructure other generations have funded them in to.

          • happy valleyMEMBER

            Don’t know as my kids finished there about 20+ years ago, but the cohort is now 80% asian (and mostly chin-ahs), so I can only presume the “relevant” anthem probably gets a fair airing?

            My old state high school has been 95% asian (again mostly chin-ahs) for at least the last 15 years, so english may not even be the first language there anymore, let alone even contemplating which “relevant” anthem gets a run once a week/day?

  2. I am currently looking to move house and am not seeing much of a fall in rent for houses,units or townhouses in Melbourne’s South East suburbs.Clayton has fallen a bit due to the absence of international students at Monash .

    • I am also looking to move in Melbourne. I could be wrong but all the eviction moratorium and other measures to help struggling renters is keeping rents up. I think all that is ending in early April, so I am waiting until then. What do you think? I think rents will come down a lot when all these assistances to struggling renters end. There will be a fair few evictions of non payers etc and a lot more vacant places for rent. I am not struggling but I am conscious that a lease is for 12 months, so if I move before April, then the rents are going to be higher until then.

      • @astrolin I think your observation is right. Most people are floating on free money at the moment. It may well be beyond second half of next year before you see substantial falls. You have a nice choice of properties in December/January time so I decided to make use of it. If a substantial fall eventuates by next year I will either renegotiate my rent down or move elsewhere.

        • Thanks for your reply and confirming my impression. I feel there is an air of unreality about the economy in general. The uplift in spending and confidence is as much people willing bad times to be over as anything else. But if you rent a new place and sign a lease for 12 months, isnt a financial penalty to break the lease? Thats why I am waiting till May or June.

          • If you can continue in your current place for another six months I would suggest to hold off your moving. My current place has things breaking apart so I have to move now. If rents fall a fair it shouldn’t be all that hard to negotiate down after 12 months.

  3. … in contrast …

    NEW ZEALAND’S TERRIFYING HOUSING INFLATION CRISIS …

    … Expect the flight of opportunity deprived New Zealanders to Australia to resume in earnest 2021 … as Australia rapidly ramps up its new detached housing production (n ote ABS latest new residential dwelling approvals ) …

    … fleeing … New Zealand Prime Minister Jacinda Ardern’s ‘Socialism For Property Speculators … Only’ …

    The national median house price increased ( artificially inflated ) by $24,000 last month ( annualized x 12 = $288,000 ) … Greg Ninness … Interest Co NZ

    https://www.interest.co.nz/property/108364/national-median-house-price-increased-24000-last-month

    … extract …

    … Prices were also setting new records, with the national median selling price increasing from $725,000 in October to $749,000 in November, up by $24,000 in a month.

    That means the national median price rose 18.5% year-on-year. …

    … In Auckland the median price hit $1,030,000, up $30,000 in a month and up by $145,000 (16.4%) since November last year. … read more via hyperlink above …
    .
    .
    REINZ NOVEMBER DATA SHOWS HIGHEST NUMBER OF PROPERTIES SOLD IN NZ IN 13 YEARS

    https://www.reinz.co.nz/residential-property-data-gallery

    • The90kwbeastMEMBER

      If Sydney is a bubble, then Auckland is far worse. $NZD 1m houses in Auckland is truly horrific, for what is ultimately a small city in the middle of no-where in the world. At least Sydney is an actual global city to in some small way start to justify/will sustain the bubble..

  4. These sorts of vacancy rates usually correlate to price falls. Not in the twilight zone economy though.

    We should open the borders ASAP.

    Let the virus in.

    Properly root the economy and then put an end to Australia’s absurd (real estate) exceptionalism.