SQM Research has released its June rental report, which recorded the lowest national rental vacancy rate since May 2011 at just 1.7%:
The next chart plots the time series at the national level and shows clearly the sharp reduction in the vacancy rate over the past year:
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And here is the time series across the major capital city markets, with Melbourne’s and Sydney’s rental vacancy rates still elevated following the loss of migrants (international students):
That said, vacancy rates fell again in the Sydney CBD and Melbourne CBD to 5.6% and 5.8%, respectively, representing a return towards more-longer term levels.
Commenting on the results, SQM Research’s managing director Louis Christopher noted:
“Rental vacancy rates have fallen in our largest capital cities. Meanwhile there was some further evidence that we have reached the high point in regional occupancy and some relief for local renters may be coming later this year, notwithstanding Sydney’s latest lockdown. Rents are now accelerating in our larger capital cities which may have ramifications for the CPI read in the coming quarters.”
Over the month to 12 July 2021, capital city average asking rents rose 1.8% for houses to $575 per week and rose 1.7% for units to $419. Over the year, capital city rents rose 7.7% for houses. However units are still recording falls of 0.5%. Outside the capital cities, rents for houses have recorded stunning increases over the year, with Brisbane up by 10.4%, Perth up by 13.7% and Canberra up by 16.4%. Nationally, rents rose 15.1% for houses over the year and 6.6% for units. Again, that growth has been fuelled by strong rises in rents in regional locations where there is a shortage of rental accommodation.
CoreLogic’s latest data confirms SQM’s results. National property rents rose by 6.6% in the year to June 2021, which was the strongest annual increase since February 2009:
And rental growth has been broad-based, with nearly all markets other than Melbourne and Sydney apartments reporting solid-to-strong growth, as illustrated clearly below:
Surely rents will soften next year as the large pipeline of HomeBuilder dwellings begin to hit the market. But who knows? The fact that rents have soared as immigration collapsed is extraordinary and counter intuitive.
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