Vacancy rates remain low from Brisbane to Perth, Adelaide to Darwin

Australia's vacancy rate fell to 0.9% in July, compared to 1.0% the month before and 0.9% the year before, according to Domain.

In national terms, supply and demand strongly favours property investors, although conditions differ from market to market

Sydney's vacancy rate was 1.2% in July, the same as the year before. “Annually, vacant rental listings remain down by 2.4% but this is an improvement compared to the deeper declines that were being experienced,” Domain said.

Melbourne's vacancy rate fell from 1.5% in July 2022 to 1.0% in July 2023. That was partly due to a 33.2% annual decline in rental listings.

In Brisbane, the vacancy rate increased over the year, from 0.6% to 0.8%. “The rental market is still moving away from the highly competitive conditions and record low vacancy rate last seen in February,” Domain said.

Perth's vacancy rate fell slightly over the year, from 0.5% to 0.4%, with rental vacancies falling 12.2% during that time.

In Adelaide, the vacancy rate rose from 0.2% last July to 0.4% this year, in tandem with a 53.2% increase in rental supply.

Hobart's vacancy rate recorded a sizeable increase over the year, from 0.5% to 1.2%. “There was a monthly fall in rental listings but it is almost triple the number of listings of July 2022, indicating a continued improvement in conditions for tenants,” according to Domain.

Canberra's vacancy rate decreased in July but increased over the year, from 0.9% to 1.8%. “The number of vacant rentals fell over the month but is seeing almost double the number of listings compared to last year. This indicates an easing of conditions for tenants,” Domain said.

Finally, Darwin's vacancy rate was unchanged at 0.7%, despite a 13.0% increase in listings over the year.

Why the current market favours investors

Vacancy rates are at historically low levels in many parts of Australia, which is challenging for tenants but favourable for property investors.

In this kind of landlords’ market, most investors are finding it easy to attract tenants and are able to command higher rents.

Furthermore, median property prices rose in every capital city during the three months to July, according to CoreLogic, so many investors are also enjoying capital growth.

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Published: 29/8/2023