Australian Rental Market Update
Australian Vacancy Rates Hold Steady for August
The latest data from SQM Research highlights the resilience of Australia’s tight rental market on the back of growing demand and low supply of properties to rent.
As property investment advisors, we’re always monitoring the pulse of the rental market. The recent report from SQM Research, released on August 12, 2024, offers some compelling insights into the current state of Australia’s rental landscape, particularly regarding vacancy rates. Excellent news for investors!
Vacancy Rates: Holding Firm in a Changing Market
Despite some fluctuations in rental prices, the national vacancy rate has remained remarkably steady at 1.3%. This persistence indicates that we’re still operating in a tight rental market, even as other factors shift. High Interest rates, Investors selling off properties etc.
A break down of the vacancy rates across key areas:
- Sydney : Maintained a stable 1.7%, with 12,123 rental dwellings vacant
- Melbourne : Held steady at 1.5%, with a slight increase to 7,979 vacant dwellings
- Canberra : Recorded the highest rate at 2.2%, up slightly from 2.1% in June
- Perth and Adelaide : Tied for the lowest rate at 0.7%, reflecting very tight markets
- Darwin : Tightened from 0.9% to 0.7%, showing increased demand
- Hobart : Saw a notable decline from 1.5% to 1.2%
The total number of vacant rental properties across Australia stands at 39,701, a slight decrease from June but still above the July 2023 figure of 38,864.
CBD Areas: Location Driven
Interestingly, CBD areas are showing varied trends:
- Sydney CBD : Increased from 5.0% to 5.5%
- Melbourne CBD : Decreased year-on-year from 4.3% to 4.0%
- Brisbane CBD : Continued strong demand with a low 2.5% vacancy rate
- Canberra CBD : Dramatic decrease from 4.0% in July 2023 to 2.7% in July 2024
What This Means for the Market
According to Louis Christopher, Managing Director of SQM Research:
“It should be noted of course that rents are still very high and this retracement is minor compared to the massive rise in rents recorded around the country since 2021. And it should also be stated that the rental crisis is still not yet over as we have recorded an ongoing low national rental vacancy rate of just 1.3%.”
This stability in vacancy rates, even as rental prices see some adjustments, suggests that demand for rental properties remains strong across most of Australia.
While our focus is on the steady vacancy rates, it’s worth noting some changes in rental prices:
- Capital cities saw a combined dwelling rent decline of 0.5% over the past 30 days
- Sydney experienced a 1.0% decrease in combined rents
- Melbourne recorded a 0.6% decline
- Brisbane and Perth also saw slight falls of 0.5% and 0.6% respectively
However, these changes should be viewed in the context of the significant rent increases we’ve seen since 2021.
Looking Ahead – Demand for Rental Properties remains high
The stability in vacancy rates, despite some fluctuations in rental prices, indicates that the Australian rental market remains tight.
properT network, as professional consultants in the investment property market, continue to monitor these trends closely, ensuring we provide sound feedback to our property investors, wanting to invest in Investment Grade residential investment property in this exciting and dynamic market.
The persistent low vacancy rates, continues to suggest that demand for rental properties remains high, which could help buffer any short-term adjustments in rental prices. For investors, this continued tight market provides some reassurance about the ongoing demand for rental properties.
Supply of new properties to the rental market Australia wide remains tight on the back of a shortage of land release availability, high interest rates and lower investor borrowing capacities.
At properT network, we continue to offer up to date research by researching property markets and investment property opportunities from all over Australia, we advocate following a successful and proven strategy of matching the ‘investment vehicle’ (the property) to meet your investment strategy, your purpose for the investment, your budget and your investment outcomes head on. When you match this to your Investment Budget, and elect to secure an Investment Grade property, you are empowering yourself towards taking control of your own financial destinies.
NB : very few properties are investment grade and worthy of your investment dollars!
Do you know which ??
To search for your ‘perfect ‘best fit’ investment property please reach out to us here or call Stephen Lazar now on 0413 108 125 to discuss your requirements.
Source: SQM Research Pty Ltd, “Rents Record Largest Falls Since Covid”, released on August 12, 2024
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