Canberra vacancy rate drops as tenants scramble to find a rental: Domain data

With new data showing Canberra topping the nation as the most expensive city to rent a unit and house, tenants are hard pressed to find a property in the capital as the rental vacancy rate drops to extreme lows.

Data from Domain showed Canberra’s vacancy rate sat at 0.7 per cent in March.

Domain senior research analyst Nicola Powell said the latest vacancy rate was “similar to the tight rental conditions seen in 2018”, which, in turn, pushed rental prices upwards.

The latest Domain Rent Report for the March quarter 2021 showed houses in the capital had a median asking price of $600 a week and units at $500 a week — the most expensive city to rent a house and unit in the country.

In March 2018, the vacancy rate was at a record low of 0.5 per cent. The latest vacancy rate is on par with February 2019 when the rate was also 0.7 per cent.

In March 2020, the vacancy rate was 0.9 per cent. 

Canberra’s rental vacancy rate has trekked along at a relatively steady pace in recent years, and PRD Canberra property manager Mitchell Cross said the local rental market had bounced back from the pandemic, which hit in March last year.

“This time last year, a lot of landlords either sold their investment properties because tenants were moving back in with parents or moving out of town. A lot of landlords were also getting $50 to $80 less than what they’d usually get pre-pandemic,” Mr Cross said.

“Today, and especially in March [this year], landlords have been trying to recoup the money that they lost by raising their rent prices and because we are in a heated market, tenants are offering more than the advertised price.”

When looking at the Canberra regions, rental properties in Tuggeranong recorded the lowest vacancy rate in March at just 0.3 per cent; this was followed by Gungahlin and Belconnen at 0.4 per cent.

Blackshaw Tuggeranong leasing consultant Rachel Tynan said the data reflected what she was seeing in the rental market.

“Tuggeranong is mainly made up of family sized, free-standing houses or single-level townhouses which are favoured by families,” Ms Tynan said.

“The large blocks and feeling of space is why a lot of families relocate to Canberra’s south — they’re nearby other similar families and walking distance to many schools in each suburb.”

Mr Cross said the three regions were popular with families also because the areas were “family friendly and reasonably priced”.

Moving forward, he expects the demand for rental properties to ease as the seasons change and the cooler months roll in.

“Traditionally, things start to get quiet because most of those who planned to move to the capital had already done so in the first three months of the year,” he said.

Dr Powell said the first three months was also a time “Australian expats return, temporary overseas employees extend stays and the city is better placed economically, buoyed by the public sector and industries reliant on government spending”.

“It’ll be interesting to see what will happen in the next three months and whether those low vacancy rates will remain,” Mr Cross said.