Vacancy rates drop again to a record low 1.07 per cent

The rental crisis is showing no signs of easing just yet, with new data finding the national vacancy rate has fallen to a record low of 1.07 per cent.

According to the latest PropTrack Market Insight report, both capital cities and regional areas saw a decline in the number of available rentals, with capital cities fairing worse after vacancy rates dipped to just 1.04 per cent.

Regional areas were marginally higher at 1.14 per cent.

PropTrack Senior Economist, Paul Ryan, said conditions for renters were the tightest they’ve ever been.

“Rental markets are proving extremely challenging for renters, with very limited availability across most of the country,” Mr Ryan said.

“February saw rental vacancy rates decline further, down 0.12 percentage points to hit a fresh low of just 1.07 per cent.”

Rental markets tightened in Sydney (1.11 per cent) and Melbourne (1.07 per cent) over the month, marking their lowest vacancy rate on record.

Perth (0.75 per cent) and Adelaide (0.83 per cent) remained the two tightest rental markets in the country, with both cities seeing conditions deteriorate further in February.

Rental vacancies have held below 1 per cent since 2022 in both of those capital cities.

Rental conditions were better in Darwin, with a vacancy rate of 2.58 per cent, followed by the ACT at 1.45 per cent and Hobart at 1.2 per cent.

Regional markets also have limited availability, after some signs of improvement in early to mid-2023. 

Vacancy rates regionally fell over the back half of 2023 and are now 0.22 per cent lower than a year ago.

Mr Ryan said most capitals and regional areas were facing as limited or more limited availability than they were compared to a year ago. 

“Sydney and Melbourne have seen notably larger declines than other capitals, with vacancy rates in both cities falling 0.3 percentage points compared to February 2023,” he said.

“Rental markets in Brisbane, Adelaide and Perth remain extremely challenging, with vacancy rates in all three cities below 1 per cent.”

He said with rental market conditions extremely tight, competition for rentals is likely to remain tough.

“In the near-term, that is likely to continue to put pressure on rents and further strain rental affordability, which is already at its worst level in at least 17 years,” he said.

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Rowan Crosby

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