INDUSTRY NEWSNationalReal Estate News

Rents likely to rise as vacancy rates fall again

There’s still no relief for struggling renters, with vacancy rates falling again in July.

According to PropTrack, rental vacancy rates dropped to 1.43 per cent in July, signalling that rents haven’t topped out just yet.

PropTrack Economist, Anne Flaherty said vacancy rates are close to half the level they were in March 2020.

“The cost of renting is likely to increase further for Australia’s tenants in the months ahead, with the national vacancy rate falling in July,” Ms Flaherty said.

Rental conditions continue to get worse in most capital cities, with Melbourne experiencing the sharpest fall in vacancy rates over the past 12 months, despite holding steady in July.

“Both capital cities and regional areas saw the supply of rental properties decrease over July,” Ms Flaherty said.

“As Australia’s fastest growing capital city, vacancy is likely to fall further in Melbourne and lead to higher rents.”

Rental conditions also deteriorated in Sydney last month, with vacancy rates dropping to 1.65 per cent.

Brisbane’s rental vacancy rate was largely unchanged over the month, rising slightly to 1.15 per cent.

While renters in Adelaide and Perth continue to face the tightest rental market conditions in the country, with vacancy rates still sitting below 1 per cent.

Regional areas also saw the supply of rental properties fall in July, with the vacancy rate dropping to 1.51 per cent.

“While vacancy rates in regional areas fell over July, they remain above the levels seen 12 months ago in every state, with regional NT and Tasmania seeing the biggest jump in availabilities,” Ms Flaherty said.

“This suggests a slowdown in the trend towards regional living that accelerated during the pandemic. 

“Although, pressure is unlikely to ease any time soon for tenants, with the number of vacant properties predicted to remain at extremely low levels over at least the next 12 months.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.