Residential vacancies hold steady in Canberra

Canberra’s vacancy rate remained stable in October, but at 1.6 per cent was still the highest of the nation’s capitals.

The latest Domain vacancy rate analysis shows that while Canberra’s rate is still high, it is 0.3 percentage points lower than the 1.9 per cent recorded in June.

In comparison, Australia’s vacancy rate has held at a record low for the second month in a row, at 0.8 per cent. Nationally, it remains challenging and competitive for tenants; however, some cities have seen some marginal improvements.

In Canberra, Brisbane, Adelaide, Hobart, Darwin and the combined regionals, vacancy rates are higher annually, while Perth and the combined capitals remain steady.

However, less competitive conditions for tenants remain in Canberra relative to other capital cities.

Blackshaw principal, Alexandra AhKey, said fewer contractors were coming into Canberra and more people were going into share housing due to rising inflation.

“There’s less demand, so properties are taking longer to shift which has also put downward pressure on rentals,” AhKey said.

Although Canberra remains one of the most expensive cities for rentals in the country, it is the only capital city where rents have fallen in the past three months, the recent Domain Rent Report found. Released last month, the report revealed house rents in Canberra had hit a two-year low – down 3 per cent for the September quarter and 3.7 per cent for the year to a median of $655 per week.

While Canberra remains less competitive for tenants, like the rest of the country, it still faces a housing shortage issue. The Domain data indicated that already-dwindling rental stock has suffered because of a lack of investor activity, ongoing development undersupply and higher construction costs.

Nationally, the number of vacant rental listings is at an all-time low. This is accompanied by a drop in rental stock across all the capitals, apart from Darwin. Australia needs 40,000 to 70,000 additional rentals to shift to a balance (a vacancy rate of 2-3 per cent).