National vacancy rates dip further in February

"The current rental market remains in crisis"

National vacancy rates dip further in February


By Mina Martin

National vacancy rates have continued to decrease to a tight 1%, alongside a notable rise in capital city asking rents, according to SQM Research’s latest findings.

Vacancy rates tighten across the board

SQM Research’s recent analysis showed a persistent decline in national vacancy rates, now sitting at a mere 1%. This represents a 0.1% decrease from January to February, tightening the grip on Australia’s rental market. The current count of rental vacancies nationwide has fallen to 30,161 residential properties, down from 32,108 in January.

While Perth and Adelaide’s vacancy rates remained unchanged, other major cities saw declines, with Sydney, Canberra, Darwin, and Hobart dropping by 0.2%, and Melbourne and Brisbane by 0.1%. Specifically, vacancy rates in the CBD areas of Sydney, Melbourne, and Brisbane have reduced to 3.3%, 2.7%, and 2.1%, respectively.

Capital city rents on the rise

In a corresponding trend, the 30 days up to March 12 have witnessed capital city asking rents for units increase by 1.2%, pushing the year-on-year rise to 11.4%.

Despite the overall increase, Darwin and Hobart experienced rent declines of 2.1% and 0.1%, respectively, while Melbourne saw the most significant uptick at 1.5%.

The national median weekly asking rent for a dwelling now stands at $721, with Sydney leading the charts for the highest weekly house rent at $1,054.16. Conversely, Adelaide maintains its position as offering the best rental affordability among all capital cities, with unit rents averaging at $457.72 per week.

Rental market under pressure

Louis Christopher (pictured above), managing director of SQM Research, commented on the findings.

“Most likely the fall in rental vacancies was driven by increased demand from tertiary students following the start of campus semesters for 2024, as well as graduates entering the workforce for the first time,” Christopher said. “It is a seasonal demand increase we see at the start of each and every year but is most certainly problematic due to the fact the current rental market remains in crisis.”

Looking ahead, SQM Research anticipates that vacancy rates will continue to decrease in March, given that weekly rental listings have shown a decline since the beginning of the month.

Access the SQM Research report here. To compare with last month’s results, click here.

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