It’s a landlord’s market, according to Domain’s latest Vacancy Rate Report, which showed the national rental vacancy rate at a multi-year low for the second consecutive month.
November recorded national vacancy rates of 1.5 per cent, and showed rental prices were expected to increase with the opening of international borders bringing in a wave of new renters, according to the report.
Vacancy rates continue to remain tight in all capital cities, except for Melbourne, compared to the April 2020 COVID-19 induced peak.
This is a significant turnaround considering the exposure Melbourne has to international students and overseas migrants as a source of rental demand, the report said.
The easing of the latest lockdown and the ability to conduct onsite rental inspections has seen the city’s vacancy rate fall to 3 per cent, the third consecutive month of decline.
Although rates remain elevated, they are gradually decreasing from the August high of 3.6 per cent. This downward trend, coupled with a 4.2 per cent month-on-month fall in rental listings, could see Melbourne’s rental market eventually become a landlord’s one, particularly as international borders reopen.
In Sydney, vacancy rates increased slightly to 2.3 per cent in November after falling the previous month. Aside from October, it is the lowest level since September 2018.
Sydney’s vacancy rate is lower than the vacancy rate recorded in March 2020, the month before the COVID-19 pandemic resulted in a bounce in the vacancy rate to 3.8 per cent.
Following last month’s dip, Canberra saw a marginal increase in its vacancy rates to 0.9 per cent over November, remaining higher than before the lockdown in July. There was a jump in the number of vacant rental listings over the month, likely reflecting the city’s emergence from lockdown. It still remains a landlords’ market.
In other cities, including Perth (at 0.5 per cent), Hobart (at 0.3 per cent), Adelaide (at 0.4 per cent) and Brisbane (at 1.2 per cent), vacancy rates are at multi-year lows, while Canberra (at 0.9 per cent) and Darwin (0.9 per cent) remain closer to reaching multi-year lows.
The report showed Adelaide’s vacancy rates are at their lowest point since Domain records began in 2017.
As the country opened up with the first month of eased restrictions following the latest lockdown, and as economic conditions improved, there would be further downward pressure on the national vacancy rate leading to potential rent increases, the report said.
“The positive outlook of reaching vaccination targets, increased job security and the opening of both domestic and international travel will benefit both renters and landlords.”