Rental crisis will last for years, expert warns

Australia’s severe rental shortage is forecast to continue for the foreseeable future, according to new research. 

The national rental vacancy rate is now resting at 1.3 per cent, with a total of 35,425 Aussie rentals currently without a tenant, a report by SQM Research has found.

A healthy rental market is traditionally defined as one where 3 per cent of rental homes are vacant – twice the number currently seen across Australia. 

More vacant rentals means more choice for renters looking to move, and lower prices for tenants overall. 

The tightest rental market around the country is in Adelaide, where the vacancy rate is sitting at a shockingly low 0.6 per cent. 

Even the city with the most forgiving vacancy rate, Canberra, is well below the healthy threshold with a vacancy rate of 2.1 per cent. 

“Overall, the national rental market remains in severe shortage and, barring some exceptions, is not expected to materially soften out of the rental crisis for some years,” SQM managing director Louis Christopher said.

However, it’s not all bad news. Although conditions are extremely tight, they have eased since last winter when no capital city recorded a vacancy rate of above 2 per cent. 

“I do believe the days of 10 to 20 per cent plus annual rental increases have come to an end,” Christopher said. 

“National rental vacancy rates fell slightly in August, and we are now expecting further falls in vacancies through spring, however this will just be a seasonal change and so we are not anticipating a reacceleration of rents,” he stated.