The national vacancy rate remains low, clocking up its fifth consecutive month at just 1.7 per cent, according to new data released by Domain.
The lengthy period of stability is the longest Domain has seen since their records began in 2017, but while there was no change nationally, there was mixed movement across the capitals.
In Sydney, Brisbane and Hobart, vacancy rates held fairly firm in September while rates fell in Melbourne, Perth, Adelaide, Darwin, and Canberra.
“During Sydney’s lockdown rental listings have increased marginally, suggesting lockdown has led to a small shift in tenants perhaps leaving their rental properties to live with family or friends,” the report stated.
“The minor increase is not enough to substantiate any movement in the vacancy rate.
“Melbourne tenants firmly have the power to negotiate rent in certain areas, however the continued drop in vacancy rate is a timely reminder that rental conditions favouring tenants might not be here to stay.
“Tenants will be operating in a landlords’ market across all capitals, apart from Sydney and Melbourne. This could continue to place upwards pressure on rents.”
The latest data indicates all cities, other than Canberra, have recorded lower vacancy rates in September 2021 compared to the same period last year.
Capital city vacancy rates September 2021
|Sep-21||Aug-21||Sep-20||Monthly change||Annual change|
The lockdown effect
The Domain report found lockdowns resulted in mixed movement across the cities affected.
In Sydney, vacancy rates have held steady for three consecutive months, remaining at 2.4 per cent. However, during the recent lockdown, rental listings increased 1.7 per cent from July to September.
Melbourne’s vacancy rate dropped marginally in September, after a rise in August, taking the city’s vacancy rate back to where it was in June earlier this year.
“While Melbourne’s rental market operates in a tenants’ market, the trajectory of the city’s vacancy rate continues to trend down from the December peak of 5.1 per cent,” the report stated.
Over this same period, rental listings have fallen 31 per cent, showing a substantial recovery, despite the current lockdown.
Canberra might be considered a landlord’s market, but the report found it had been challenged by the city’s current lockdown.
The vacancy rate dipped marginally over September but remains higher compared to pre-lockdown in July.
Over the same period, rental listings have surged, rising 39 per cent and challenging the city’s status as a landlords’ market.
A landlords’ market
Beyond Sydney and Melbourne, all other capitals are considered a landlord’s market, according to the report.
Vacancy rates in Perth and Adelaide are at multi-year lows, while Canberra, Darwin and Brisbane remain close to multi-year lows.
“As the states and territories move towards their mass vaccination targets, the roadmap to opening up is becoming more clear,” the report said.
“This will be a welcome boost to landlords, as the rental market becomes more competitive. Tenants will likely face the prospect of higher rents.
“However, should any further lockdowns arise, we should expect rental listings to rise and vacancy rates to surge higher, if they persist for an extended period of time.”
Regions with vacancy rate rises
The regions with the most noticeable rise in vacancy rates are dispersed across Sydney, Brisbane, Perth, Darwin, and the Gold Coast.
The Gold Coast Hinterland region topped the list of regions with the largest monthly rise in the vacancy rate.
Sydney contributed four regions to the list, with Sydney Inner City (second), Ku-ring-gai (fourth), Leichhardt (fifth) and Baulkham Hills (eighth) recording the most substantial rise in vacancy rates within the city over the month.
Kenmore-Brookfield-Moggill region (third) was the only area to make the list within Brisbane city.
Meanwhile, two Perth regions made the list, with Mandurah (seventh) and Swan (ninth) both recording a significant rise in their vacancy rates over the month.
Largest monthly rise in vacancy rate within a capital city
|1||Gold Coast||Gold Coast Hinterland|
|2||Sydney||Sydney Inner City|
|3||Brisbane||Kenmore – Brookfield – Moggill|
These are the areas with the largest monthly rise in vacancy rates.
Largest monthly decline in vacancy rate within a capital city
|5||Melbourne||Moreland – North|
|7||Sydney||Cronulla – Miranda – Caringbah|
|9||Hobart||Sorell – Dodges Ferry|
|10||Sydney||Kogarah – Rockdale|
These are the areas with the largest monthly decline in vacancy rates.