The national vacancy rate has tumbled to a record low, dipping under 1 per cent and heaping more pressure on tenants already struggling with rising rents.
According to Domain’s July Rental Vacancy Rate Report, the national vacancy rate dropped to 0.9 per cent after holding steady for four straight months.
Sydney’s vacancy rate has fallen to a record low 1.3 per cent, while Melbourne’s vacancy rate of 1.4 per cent is now at its lowest level since March 2019.
The Perth and Adelaide rental markets continue to tighten and remain the most competitive cities for tenants, falling over the month to a record low 0.5 per cent and 0.2 per cent respectively.
While Brisbane, Hobart and Canberra remained steady, Darwin was the only city to see an increase in the vacancy rate – bucking the national trend.
Domain Chief of Research and Economics Dr Nicola Powell said vacancy rates had been steadily decreasing for the past 12 months.
“Nationally, vacant rental listings are 45 per cent lower over the year and have fallen across most of the capital cities,” Dr Powell said.
“The rental market remains firmly in favour of landlords’ across every capital city, with a shortage in rental supply driving up asking rents and further escalating competition between tenants.
Dr Powell said while times might be tough for tenants, there could be signs vacancy rates could ease.
“While vacancy rates have fallen in July, we could see rental conditions stabilise in the coming months with the rise of investment activity helping to alleviate tightening conditions,” she said.
According to the report, all capital cities continue to operate in a landlords’ market, with a shortage in supply and availability of vacant rentals driving up asking rents and further escalating competition between tenants.
The return of overseas migrants and international students, higher household formation, and affordability issues with purchasing a property continue to pressure the rental market.
Across Sydney median house rents jumped 3.3 per cent over the quarter to a record high, and unit rents surged 5 per cent according to the report.
Unit rents are now higher than at the start of the pandemic and are on track to surpass the 2018 record next quarter if they continue at the current growth rate.
While Sydney’s vacant rental stock fell to its lowest level since April 2017 and is tracking 47.2 per cent lower compared to this time last year.
The number of vacant rental listings in Melbourne fell more than any other capital over the month, down 59.2 per cent annually.
The report showed that Melbourne house rents climbed 2.2 per cent over the quarter and unit rents jumped 5.1 per cent.
Vacancy rates in Brisbane remain at a record low of 0.6 per cent, while available rentals saw an uptick over the month but are still 49.4 per cent lower annually.
Canberra was the only city to see an annual increase in rental stock.