The most undersupplied city locations for rental houses have been revealed, with some locations recording very few available properties for tenants.
Suburb Trends research found four significantly undersupplied metro locations where residential vacancy rates hit just 0.1 per cent back in May, with the remainder of the top 10 recording a vacancy rate of only 0.2 per cent.
Your Property Your Wealth director Daniel Walsh believed such critically low vacancy rates represented markets with no rental supply in practice, with the most undersupplied areas also being some of the most affordable for tenants.
“The research found that the 10 city suburbs with the lowest vacancy rates for rental houses all had median weekly rents of $340 to $450,” Mr Walsh said.
“This shows the dire situation for many tenants who are struggling to secure an affordable rental property in our capital cities because the supply has mostly dried up.”
The research found that Greater Brisbane had four of the most undersupplied city rental house markets in the country, followed by Greater Perth and Greater Adelaide with two, and Greater Hobart, Greater Sydney, and Greater Melbourne with one each.
Mr Walsh said the rental undersupply situation in Greater Brisbane was likely to become worse before it gets better given the region is welcoming the lion’s share of interstate migration, with a net gain of 5000 people in the December quarter alone – the largest since 2002.
The study found the suburbs with a vacancy rate of just 0.1 per cent were Wanneroo (Perth), Onkaparinga (Adelaide), Loganlea (Brisbane), and North West Hobart (Hobart).
Mr Walsh said while investor activity had been increasing since the start of this year, it still remained below historical averages, which meant that the rental undersupply situation was unlikely to change over the short-term.
The share of investor finance secured for the purchase of property in April was 25.9 per cent and remains well below the 35.3 per cent decade average, according to official data.
“Rental markets were heading into undersupply territory long before the pandemic,” Mr Walsh said.
“This was because of the overly restrictive lending criteria that was implemented more than four years ago, which greatly reduced the normal flow of investment activity in the market.
“Now, the fallout of that policy has come home to roost, with hundreds of city suburbs across the country having very few rental properties available for prospective tenants.”
According to the research, more than 30 city suburbs recorded a vacancy rate for rental houses of just 0.1 or 0.2 per cent in May.