New figures from Domain show Australia’s vacancy rate remained stubbornly low during February, with the company reporting a spike in rental search traffic from China.
The national vacancy rate remained at 0.8 per cent (its lowest point on record) during February, with vacant rental listings dropping 33 per cent since this time last year.
Domain Chief of Research and Economics, Dr Nicola Powell said that high demand and low supply were conspiring to keep rental vacancies low.
“The increased demand has been fuelled by the return of international and domestic travel, overseas migration, foreign students, and the recovery of temporary visa holder numbers,” Dr Powell said.
Some of this demand was due to a recent decision by the Chinese government to make university students return to physical campuses, Dr Powell said.
Since the announcement, Domain’s unique search data saw the number of searches from China for rentals jump 87 per cent compared to December and 175 per cent annually.
“Following the announcement from China’s Ministry of Education banning citizens from studying online at foreign universities, Chinese students have been left scrambling to secure a visa and find somewhere to live,” Dr Powell said.
“Universities Australia said that this move would encourage some 40,000 Chinese students to return to Australia, which will put huge pressure on an already stretched rental market.
“This is already playing out as we’ve seen a spike in searches for rentals from China on Domain.”
Perth and Adelaide have the tightest rental markets in the country, each with a vacancy rate of 0.3 per cent (unchanged from January).
Sydney’s vacancy rate now stands at 0.9 per cent, nearly half of what it was a year ago.
Melbourne’s vacancy rate decreased to a new record low of 0.8 per cent in February, nearly three times lower than it was last year.
Brisbane’s vacancy rate returned to a record low of 0.6 per cent. While vacancy rates have increased, the recent stability shows that the rental market may be moving away from the highly competitive conditions that were seen last year.
Hobart was the only capital city to see an increase in its vacancy rate during February, up to 0.6 per cent.
Canberra and Darwin vacancies stand at 1.5 per cent and 1.2 per cent.
Hobart was the only capital city to see an increase in its vacancy rate, up to 0.6%. This was driven by a surge in rental listings.
The vacancy figures come as the Real Estate Institute of Western Australia reported Perth’s median rents had reached a all-time high of $535 a week in February.
Rents in the city are now $15 higher than January (up 2.9 per cent) and $85 or 18.9 per cent higher than February 2022.
REIWA Chief Executive Officer, Cath Hart, said there needed to be between 18,000 to 20,000 properties added to the rental pool in order to return to a balanced market.
Nearly 19,000 rental properties had been removed from the rental pool in the past two years due to investors exiting the market, she said.
“This reduction in rental properties combined with a continually growing population is driving WA’s rental shortage,” Ms Hart said.