Canberra's vacancy rate tumbles

Canberra’s residential vacancy rate has decreased to 1.3 per cent, its lowest point since November 2022, according to the February Domain Vacancy Rate Report.

It is the largest monthly change of the capitals – a fluctuation of nearly 20 per cent – but conditions here remain less competitive for tenants relative to other major cities.

Canberra ended 2023 on a high note with a vacancy rate of 2 per cent, but conditions soon became more competitive in the new year, with the rate falling to 1.5 per cent in January.

The data shows the biggest decrease was in South Canberra, which now sits at 1.2 per cent.

On a national basis, Australia’s vacancy rate fell to a new record low of just 0.7 per cent in February.

The mismatch between low supply and rising demand is an ongoing challenge for tenants amid rapid population growth (from overseas migration), a strained construction sector and rising property prices locking people into renting for longer.

According to Domain, nationally, average views per rental listing decreased in February and remains lower annually.

While supply has fallen to a record low, the number of prospective tenants per rental listing is easing, indicating falling competition between renters.

Domain chief of research and economics Dr Nicola Powell said there were a number of first-home buyer incentives available across the states, plus the prospects of the hotly discussed Help to Buy scheme.

“We’ve seen more first-home buyers entering the market,” she said. “This trend will likely accelerate with the introduction of new incentives for first-time buyers, coupled with the possibility of interest rate cuts.

“This could translate to reduced demand in the rental market and an increase in available rental properties for tenants.”