City vacancy rate drops below regional areas

The national vacancy rate has fallen to just 1.47 per cent, less than half the level seen before the pandemic, according to the latest PropTrack figures.

Released today, the PropTrack Market Insight report showed the national vacancy rate fell 0.1 percentage points in February and is now at its lowest level since 2018.

PropTrack Senior Economist and report author Paul Ryan said capital cities had witnessed a rapid rental market tightening, with the capital city vacancy rate dropping 0.14 percentage points to just 1.43 per cent.

“It is now harder to find a rental in capital cities than regional parts of the country for the first time since before the pandemic,” he said.

“Adelaide and Perth have the fewest available rentals, less than one per cent of rental properties are currently available.

“Perth vacancy rates are 70 per cent lower now than pre-pandemic levels.”

Sydney and Melbourne markets have also constricted after a resurgence in inner-city demand.

The report showed Sydney’s vacancy rate dropped 0.18 percentage points in February to 1.7 per cent, while Melbourne’s fell 0.21 percentage points to 1.41 per cent.

Mr Ryan said rental vacancy rates had fallen 0.6 percentage points over the past year and lack of supply would continue to drive rapid rent price increases.

“Strong demand for rental properties continues to push vacancy rates lower, and prices higher,” he said.

“With demand for rentals expected to remain strong, we see no reprieve for tenants in the coming months. 

“These rental market conditions mean rent prices will continue to grow strongly throughout 2023. 

“The financial pressure renters across the country are already feeling will be exacerbated over the remainder of 2023.”

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.

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