Asking rents surge amid tight vacancies

Australia’s rental crisis continues to worsen, with SQM Research recording a surge in asking rents amid tight vacancies.

While the national vacancy rate rose 0.1% in April to 1.1% on the back of the smaller capital cities (see below table), asking rents nationally soared another 1.4% over the month to be 13.8% higher year-on-year:

SQM Rental vacancy rate

According to SQM Research:

While some regions recorded a slight lift in vacancies, rental conditions remain tight with the average regional rental vacancy rate remaining well below 1%.

Over the past month to 12 May 2022, capital city asking rents rose by another 1.4% with the 12-month rise standing at 13.8%. Capital city house rents are recording 12 month increases of 15.3%, while unit rents have risen by 13.1%.

Louis Christopher, Managing Director of SQM Research said:

“Rental conditions slightly improved for tenants over April and our weekly rental listings for May suggest another slight easing. Potentially more property owners are responding to the tight rental market and are looking to lease their properties once again after taking their investment property off the market during the bleakest periods of Covid. So, while it’s way too early to state the worst is over for the national rental market, we may be close to that point. Clearly landlords remain confident as they lifted their asking rents by another 1.4% over the past 30 days.”

With the federal government intent on rebooting the mass immigration ‘Big Australia’ policy, it is likely that the rental situation will get worse before it gets better.

Unconventional Economist

Comments

  1. pfh007.comMEMBER

    A national rental vacancy rate of 1.1% means one thing.

    There is a massive shortage of houses available to rent right across Australia.

    The key criticism of both the Liberals and the ALP is the lack of policy support for new housing construction over pumping more dough into our bloated and over heated markets for existing housing.

    The Federal Government should place a bounty on every NEW house and NEW unit released to the market and sold to a first home buyer.

    $200,000 for a house and $100,000 for a home unit paid to the buyer once the sale has settled.

    $10 billion would pay for 50,000 house bounties or 100,000 unit bounties.

    Chicken feed compared to the hundreds of billions this hopeless government has been spraying around over the last few years.

    Once we hit a residential vacancy rate of at least 4% the program can be scaled back.

  2. Melbourne’s vacancy rate is much higher than the other cap cities. Because of the people who fled during the lockdowns I presume?

  3. reusachtigeMEMBER

    This is great news! I’ve got some sh1tty families I can’t wait to put on the street for better paying customers who won’t whinge about safety issues for kids!!

  4. DingwallMEMBER

    Do we know what % of housing is now used for AirBnB and the trends? Maybe everyone has moved their rentals into that market thinking they can get similar overall returns but sell quicker/move in at the drop of a hat or something?

    Something does not seem right so still can’t come to grips as to why rentals are so tight (yes I know supply/Demand but, I assume, renters and investors were buying houses that in turn means a sort of equilibrium or even less demand)
    Or do we now have huge volumes of empty investment properties? Or every 2nd person has a weekender somewhere?