Home rental vacancy rates tighten over August

Bad news for tenants with the national capital city rental vacancy rate for houses tightening over August with low levels of vacancies reported in most cities.

Although the rate for houses fell, the vacancy rate for units remained steady over the month at 2.6 percent. The national unit vacancy rate however is still lower than that recorded over August last year despite the recent surge in new apartment development in most capitals.

The national vacancy rate for houses over August at 2.2 percent is slightly higher than the 2.1 percent reported over August last year.

Sydney’s house vacancy rate eased slightly over the month to a still tight 1.9 percent, with the Melbourne result falling to just 1.5 percent and down on the 1.7 percent recorded over August last year.

The unit vacancy rate in Sydney was steady over August at 2.3 percent with the Melbourne unit rate falling to 2.4 percent to be well below the 2.9 percent recorded over August 2015.

Brisbane vacancy rates were steady over the month with results for Perth – where vacancies for houses and units fell – indicate that the local market may be levelling off after sharp increases in rates over the past year.

Despite the improvement over the month, the Perth rental market clearly retains the highest vacancy rates for both houses and units of all the capitals with recent downward pressure on rents likely to continue.

By contrast, vacancy rates in Hobart and Canberra remain clearly the lowest of all the capitals with shortages of available homes for rent.

High levels of migration into Sydney and Melbourne and low first home buyer numbers are continuing to keep vacancy rates relatively low despite recent record levels of new dwellings and a strong revival in investor activity.

Rent increases are likely to continue although this will be constrained by the low level of incomes growth generally in the economy.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn