SQM Research has released its August rental report, which recorded the lowest national rental vacancy rate since March 2011 at just 1.6%:
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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The next chart plots vacancies across the five main capitals, with the smaller majors experiencing extreme tightness. Melbourne’s and Sydney’s rental vacancy rates are more elevated following the loss of migrants (international students):
Vacancy rates in the Sydney CBD and Melbourne CBD also remain high at 7.8% and 8.3% respectively.
The tightening vacancy rates are causing rents to surge, especially across the regions:
Over the month to 12 September 2021, national asking rents rose 1.3% for houses to $533 per week and units rose by 0.2% to $402 a week. The national rise was driven by larger regional increases over and above the capital cities. SQM Research believes the lockdowns may have triggered another wave of interest in regional living as many of the community seek freedom away from harsh Covid measures.
Capital city rents remained steady for houses over the past 30 days and are up by 9.1% over the past 12 months. Rents for units rose by 0.2% over the past 30 days and up by just 1.9% for the past 12 months.
Rents rose for most regions around Australia. Rents for houses in North Coast NSW rose by 4.2% for the month. Rents rose by 6.7% for the month in Sydney’s Blue Mountains. Rents also rose by 4.8% for houses in the Mornington Peninsula and rents rose a stunning 8.2% for houses in Toowoomba.
According to Louis Christopher, managing director at SQM Research:
“There are strong signs the current lockdowns are creating another wave on interest in regional property. SQM Research has recorded new falls in rental vacancy rates across many of our regions, while at the same time, CBD rental vacancy rates have surged again over August. While it is true that a number of regional areas have been in lockdown, it has been perceived that the regional lockdowns have not been as harsh or as widespread compared to the city-wide restrictions.
Going forward, we anticipate that vacancy rates will fall again over the month of September. Weekly listing updates through to the 12th of September suggest a further tightening of conditions and so it is reasonable to expect another surge in rents in most areas except for the CBD locations.”
CoreLogic also recorded the fastest rental growth since the Global Financial Crisis hit in 2008, with rents up 8.2% year-on-year in August, led by the smaller capitals:
It’s a white hot rental market.