National vacancy rates have hit their lowest point on record, falling to just 1.1 per cent in February.
According to the latest Domain Rental Vacancy Rate report, this was the lowest level since the platform started keeping records in 2017.
Domain Chief of Research and Economics Dr Nicola Powell said with international and internal borders now open it would only tighten the rental market further.
“Australia is on the verge of a rental crisis, as rental demand will likely skyrocket following the opening of international borders to fully vaccinated travellers, following two years of closures,” she said.
“This resurgence in rental demand will predominantly be in Sydney and Melbourne, the two cities to see the biggest drop in vacancy rates over February.
“Choice for tenants will further decline as some landlords convert investment properties back to short-term holiday rentals. This is likely to further tighten the rental market.”
Vacancy rates fell in all capital cities except Adelaide and Hobart, with Sydney’s 0.2 per cent drop in February pushing its rate to just 1.7 per cent.
“Sydney is well below pre-Covid levels and the lowest it has been since November 2017,” the report said.
“Adelaide and Hobart are the most competitive capital city rental markets, with vacancy rates extremely low, at 0.3 per cent and 0.2 per cent respectively, creating a rental crisis and making it impossible for prospective tenants to find a lease.”
Melbourne vacancy rates, which are recovering from a spike during the peak of Covid, have fallen to 2.1 per cent.
In Canberra and Perth vacancy rates have dropped to 0.5 per cent, while in Darwin they have fallen to 0.6 per cent and in Brisbane they’ve slid to 0.8 per cent.
“Most cities recorded a monthly decrease, except Adelaide and Hobart remaining steady,” the report said.
“As the nation opens its international borders and all states’ internal borders, it is anticipated that choice for tenants will decline as landlords convert investment properties back to short-term holiday rentals.
“This is likely to further tighten the cities rental markets.”
In Sydney, the area with the highest vacancy rate is Ku-ring-gai at 3.1 per cent, while the lowest vacancy rate can be found in Camden at just 0.2 per cent.
In Melbourne, Stonnington East has the highest vacancy rate at 4 per cent, while the Yarra Ranges has the lowest at 0.3 per cent.