INDUSTRY NEWSNationalReal Estate News

Some capital city vacancy rates starting to ease

The nation’s vacancy rate remained at its lowest point on record in April, at 0.8 per cent, despite the number of available rentals increasing slightly in five capital cities.

According to the Domain Rental Vacancy Rate Report for April, it’s the fourth consecutive month the vacancy rate has sat at its lowest point.

Domain’s Chief of Research and Economics, Dr Nicola Powell said it was still very much a landlord’s market, with rental listings 18.2 per cent lower annually.

However, she said most capital cities were starting to see some stabilisation.

“It continues to be a challenging environment for tenants but the run of steady vacancy rates suggests conditions have stabilised,” she said.

“It is positive to see that the majority of cities are seeing a rise or stabilising, so if this trend continues, it could indicate a turning point for the broader rental market. 

“Rising and record asking rents will persist until we see vacancy rates lift much higher but we might start to see a slowdown in the pace of rental price growth as supply lifts.”

Hobart led the way with the biggest increase in its vacancy rate, climbing a modest 0.3 per cent from 0.8 per cent in March to 1.1 per cent in April.

Sydney, Melbourne, Adelaide and Canberra all recorded a 0.1 per cent rise.

Brisbane (0.7 per cent) and Perth (0.4 per cent) recorded no change to their vacancy rates and it was the same story for the combined capitals (0.8 per cent) and combined regionals (0.9 per cent).

Darwin was the only capital city to see a decline in its vacancy rate from 0.9 per cent in March to 0.7 per cent in April. 

This is 0.2 points lower than the record low last seen in June 2022.

Dr Powell said the rise in Hobart’s vacancy rate meant it now sits at the highest rate since May 2020.

“This is driven by a significant jump in rental listings both monthly and annually,” she said.

“It’s at its largest level of stock in three years and is triple the number of listings in April 2022, suggesting that conditions for tenants will improve.  

Dr Powell attributed Sydney’s vacancy rate rise to a boost in rental stock, but noted it was still at an all-time low for April and down 29.8 per cent annually.

She said a jump in rental listings lifted Melbourne’s vacancy rate but noted it continued to see a tighter market than Sydney for the third consecutive month.

“It continues to see the greatest annual fall in rental listings of the capitals, down 53.9% annually and at an all-time low for April,” Dr Powell said.

On the other hand, Canberra’s rental market is easing. The 1.7 per cent vacancy rate is only 0.1 per cent off the record high from 2019.

“The number of vacant rentals rose over the month and year and is seeing almost triple the number of listings compared to this time last year,” Dr Powell said.

“The continual rise indicates an easing of conditions for tenants.”

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.