Vacancy rates still at record low but some cities show signs of easing


Australia’s rental market remains in favour of landlords as vacancy rates held steady at record lows, but signs of easing are starting to appear in some markets.

According to Domain’s latest research, national vacancy rates continued to be at the lowest point on record at 1% in June, making the market very competitive and challenging to tenants.

However, the stabilisation of vacancy rates over the last four months and the signs of easing in some areas could potentially signal a turning point.

For instance, regional markets reported an increase in vacancy rate, up from 0.6% in May to 0.7% in June.

This was also the case in Hobart and Canberra, which both recorded a 10-basis point increase in vacancy rate to 0.5% and 0.8%, respectively.

Still, Australia remains a landlords’ market, with the number of rental homes still down by 42.2% from last year.

“The rise of investment activity over recent months could be helping to alleviate conditions marginally since most cities are seeing vacancy rates hold or improve, apart from Melbourne,” Domain said.

Monthly vacancy rates

  Jun-22 May-22 Jun-21 Monthly change Annual change
National 1.0% 1.0% 1.7%
Combined capitals 1.1% 1.1% 2.1%
Combined regionals 0.7% 0.6% 0.7%
Sydney 1.4% 1.4% 2.5%
Melbourne 1.5% 1.6% 3.4%
Brisbane 0.6% 0.6% 1.2%
Perth 0.6% 0.6% 0.8%
Adelaide 0.3% 0.3% 0.5%
Hobart 0.5% 0.4% 0.4%
Canberra 0.8% 0.7% 0.7%
Darwin 0.5% 0.5% 0.5%

Here’s how some cities performed over the past month:

  • Sydney – Sydney could potentially be at a turning point as vacant rental stock increased slightly in June, which ended the five consecutive months of decline.
  • Melbourne – Vacancy rates in Melbourne dropped to 1.5%, reaching the lowest point since February 2020. Vacant rental listings also fell for the sixth consecutive month.
  • Brisbane – Rising investment has not been able to keep pace with rising rental demand in Brisbane, as available rentals declined by almost 10% while vacancy rate remained at a record low of 0.6%.
  • Adelaide – Of all capital cities, Adelaide was the most competitive city and is in a rental crisis, with barely any available rental listings.

The volume and change of vacant rentals

  Jun-22 Monthly change Annual change
National 24,481 -0.7% -42.2%
Sydney 8,024 0.6% -44.2%
Melbourne 7,888 -4.3% -52.9%
Brisbane 1,433 -9.4% -51.6%
Perth 947 -12.8% -32.2%
Adelaide 338 -3.2% -50.1%
Hobart 118 34.1% 21.6%
Canberra 335 15.5% 4.4%
Darwin 96 -2.0% 1.1%
Combined capitals 19,179 -2.7% -47.7%
Combined regionals 5,302 7.2% -6.2%

The research said the return of overseas migration and the intake of international students will place pressures on demand for rental properties.

However, an offsetting trend would be the number of tenants transitioning to homeownership, which is being supported by several new first-home buyer incentives in place and the cooler purchasing conditions.

Photo by @ivan-samkov on Pexels.

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