Domain has released rental vacancy data for May, which shows that the national rental vacancy rate has fallen to its lowest level since Domain records began in 2017:
Vacancy rates have fallen particularly hard across the smaller capitals, with Brisbane (1.3%), Adelaide (0.6%) and Darwin (0.5%) all posting record low vacancies.
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Vacancy rates across Sydney (2.7%) and Melbourne (3.8%) has also fallen from record highs, driven by big declines in vacancies and listings across the CBDs.
In Melbourne’s CBD, apartment vacancies dropped to 8.6% from a peak of 14.6% last October. In Sydney’s CBD, vacancies fell to 2.9%, down from a peak of 5.8%.
The decline in rental vacancies is odd given actual dwelling construction is booming amid minimal population growth. This would normally signify rising vacancies.
The reason could be that household formation rates have accelerated as Millennials leave home.
Regardless, the collapse in vacancies points to further rental increases, which are already rising fast.