Canberra rental market tightens over August

The Canberra rental market continues to provide bad news for tenants with an underlying shortage of accommodation pushing down already tight vacancy rates and putting upward pressure on rents.

Canberra vacancy rates for houses remained steady at just 0.8 per cent over August, which was also the same result as recorded over August last year.

Although the house vacancy rate was steady over the month, the Canberra result remains clearly the lowest of all the mainland capitals, with the next lowest Adelaide at 1.4 per cent.

The Canberra vacancy rate for units, however, has tightened over August, falling from 1.8 per cent to just 1.5 per cent. This is lower than the 1.6 per cent recorded over August last year and again the lowest of all the mainland capitals.

The overall vacancy rate for Canberra homes inclusive of houses and units fell from 1.2 per cent to 1.1 per cent, which was also the same as recorded over the same month last year.

Low and tight vacancy rates have affected rents in Canberra with winter house rents increasing by 2 per cent to $510 a week compared with autumn and have surged over the past year, up by 7.4 per cent.

Canberra unit rents remained steady at $420 a week over the three winter months ending August, but similar to houses have increased sharply over the past year – rising by 5 per cent.

The Bureau of Statistics has released the latest GDP economic growth data for the June quarter, which revealed a national increase of 0.8 per cent over the quarter and a rise of 1.8 per cent over the year.

Although the quarterly result was an improvement on the 0.3 per cent recorded over the previous quarter, the annual growth rate together with the previous March quarter result remain the lowest reported for any quarter since the 1.2 per cent recorded over the September quarter 2009, which was affected by the global financial crisis.

The ACT was an economic growth underperformer over the June quarter, with state final demand decreasing by 0.2 per cent following an increase of 0.6 per cent over the previous March quarter and it increased by just 1.2 per cent over the year.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.