Rental vacancy rates hit new low, new PropTrack report finds

Australia’s national rental vacancy rate fell 0.6% down to 1.06% in September according to the latest PropTrack Market Insight Report. It also found that vacant properties are now 55% below March 2020 levels.

Overall, rental vacancies were down in both capital cities and regional areas. Most cities and regions have seen vacancy rates fall on a quarterly basis. The report notes that vacancy rates are now below 1% in three capital cities with other markets potentially joining the list as demand continues to grow.

Cities
Vacancy Rate
Region
Vacancy Rate
Sydney
1.18% (-0.11%)
NSW 
1.22% (-0.08%)
Melbourne
1.15% (-0.6%)
VIC
1.10% (0.02)
Brisbane
0.86% (0.02%)
QLD
0.89% (-0.06%)
Adelaide
0.65% (-0.04%)
SA
0.65% (-0.05%)
Perth
0.71% (0.01%)
WA
1.11% (-0.14%)
Hobart
1.40% (-0.13%)
TAS
1.16% (-0.07%)
Darwin
1.80% (0.10%)
NT
1.50% (-0.49%)
ACT
1.62% (-0.11%)
Average Regional
1.06% (-0.06%)
Average City
1.06% (-0.05%)
National Vacancy Rate 
1.06% (-0.06%)

Sydney's vacancy rate slid to 1.18%, while Melbourne followed closely with a rate of 1.15% on a monthly basis. Both cities continue a trend of quarterly decline in rental vacancies, mirroring the national trend.

On the other hand, vacancy rates held relatively steady in Brisbane, rising a slight 0.02 percentage points to 0.86%, while Adelaide and Perth recorded the lowest vacancy rates with 0.65% and 0.71% respectively. Hobart saw the sharpest drop in capital vacancies over the month, falling by 0.13 percentage points to 1.4%. 

Regional areas haven’t been immune either. Apart from Victoria, regional vacancy rates have dropped, with regional South Australia at 0.65% and Queensland at 0.89%. However, the biggest decline so far has been in the Northern Territory with a monthly fall of 0.45%

How will renters be affected by lower vacancy rates?

While cities and regional areas have seen variable rates of decline, the broadly consistent fall to 1.6% on average points to a tougher rental market.

“Declining vacancy rates are increasing competition for rentals and placing growing pressure on rents.” says PropTrack economist Anne Flaherty. “As a result, rents are predicted to continue rising at above-trend levels over the coming months, particularly in the capitals.”

In the long run, It remains to be seen whether recent legislation and the increasing pipeline of build-to-rent properties will help to alleviate the tight market for both renters and prospective home buyers

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