Vacancy rates back at pre-COVID levels

All capital cities, except Hobart, recorded declines in vacancies over January.

Even without recording a fall, the Tasmanian capital still managed to record the lowest vacancy among all capital cities, at 0.6 per cent.

This was followed closely by Adelaide with a 0.7 per cent vacancy rate and Perth, Canberra and Darwin with 0.8 per cent.

The bigger capital cities saw higher vacancy rates, with Melbourne leading at 4.4 per cent, followed by Sydney with 3.2 per cent and Brisbane with 1.7 per cent.

Right now, Melbourne has the highest number of vacant residential properties sitting at 27,432, followed by Sydney with 24,309. The gap widens with Brisbane, which, at third place, only has 5,886 vacant properties.

Despite still-elevated levels of vacancy, SQM Research’s managing director, Louis Christopher, said there is evidence proving that the worst is over for the Sydney and Melbourne rental markets.

“The falls in vacancy rates for the month in those two cities, combined with the increased tightness in other cities and regions, has now brought rental vacancy rates down to below where they were prior to the outbreak of COVID-19.”

However, the managing director was quick to point out that “there will not be a complete reversal of the sharp rise in rental vacancy rates experienced in these locations in earlier 2020”.

Rents

Capital city average asking rents increased 0.7 per cent for both houses and unit over the past 30 days to 12 February.

Median house rent now sits at $552 per week, while median unit rent sits at $412 per week.

SQM Research revealed that the majority of capital cities recorded increases in both house and unit asking rents, with Sydney recording the highest increase of 3.2 per cent for houses and 2.2 per cent in unit asking rents.

On the other hand, Melbourne continued to record declines for both house and unit rents, falling by 0.1 per cent and 0.4 per cent, respectively.

Across the capital city markets, Canberra recorded the highest median rent for both houses and units at $672 per week and $489 per week, respectively.

Meanwhile, Adelaide had the most affordable median house and unit rents at $425 per week and $317 per week, respectively.

Looking ahead

Despite promising movements in capital city rental markets, Mr Christopher said the impacts of the pandemic might still be felt in the coming months.

“Demand for inner-city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns,” he suggested.

“This will mean 2021 will remain largely a tenant’s market in the inner cities, but will also very much remain a landlord’s market for regional Australia.”

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