New data from Domain shows that the nation’s rental vacancy rate fell to a record low 1.0% in March, with all capitals other than Sydney and Melbourne posting vacancy rates below 1%:
According to Domain’s chief of research and economics, Nicola Powell, the Australian rental market will tighten even further as immigration ramps-up:
“Many cities are sitting at record high asking rents with the current tightening conditions swinging favour towards landlords and bolstering any future potential rental price increases,” she said. “The rise in overseas migrants, who will rent upon arrival, will spiral rental demand further and worsen conditions for tenants.”
Australia’s rental market is facing a perfect storm. The market has already tightened despite low population growth, due to the pandemic-induced shrinkage in average household size (as people demand more space).
Now the international border has reopened to immigration, with the Morrison Government targeting at least 200,000 migrant workers to arrive in Australia between November 2021 and July 2022.
Then there’s the recent floods, which will exacerbate the shortage of rental accommodation in NSW and Queensland.
The inevitable outcome is that rental vacancy rates will tighten further and rents will continue to rise strongly. As always, it will be the poor that are hit the hardest.
