Capital city rental vacancy rates still tight for tenants

The national capital city residential rental vacancy rate eased slightly over April compared to the previous month reflecting relatively lower levels of demand due to the various holiday distractions over the month.

The national vacancy rate for houses increased from 2.1 percent to 2.2 percent and remained above the 2.1 percent recorded over April last year.  National unit vacancy rates also increased over the month up from 2.3 percent to 2.5 percent but below the 2.8 percent result over the same month last year.

The total national home vacancy rate inclusive of houses and units increased from 2.2 percent to 2.3 percent over the month but remained lower than the 2.4 percent recorded over February 2015.

All capital cities reported a tightening of vacancy rates for houses and units over the month clearly reflecting seasonal impacts.

Overall vacancy rates for houses remain below 2.0 percent in most capital cities indicating ongoing tight conditions in these rental markets.

Vacancy rates eased for houses in Sydney, Brisbane, Perth and Hobart over April with rates steady in Melbourne Adelaide and Canberra. Darwin was the only capital to record a tightening of vacancy rates over the month.

Capital city unit vacancy rates remain clearly higher than those recorded for houses reflecting recent high levels of new apartment construction in most markets.  Unit vacancy rates in Melbourne, Canberra and Sydney however are now tracking lower than a year ago despite record levels of new supply.

Vacancy rates for units in Brisbane and Perth however remain significantly higher than those reported a year ago.

Although vacancy rates remain high in Darwin, early signs are emerging of a rebalancing of the local rental market with rates for both houses and units falling over the month

Most capital city rental markets remain highly competitive for tenants with house vacancy rates below 2 percent in Sydney, Melbourne, Adelaide, Canberra and Hobart.

Perth continues to record the highest vacancy rates of all the capitals at 3.9 percent for houses and 4.3 percent for units with rates continuing to rise

Vacancy rates for houses can be expected to tighten in most capitals as the impact of the April holidays diminishes and demand for rental properties increases.

Apartment markets however will continue to provide a wider choice of rental properties reflecting recent record levels of apartment construction adding to the stock of housing.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson – My Property 2UE Fridays 2-3pm, Saturdays 1230-1pm