The odds are still in favor of landlords in Australia’s rental markets as national vacancy rates remain stable at a multi-year low.
Domain’s latest vacancy report found that the vacancy rate in Australia stood at 1.5% for the second consecutive month in November, the lowest level since Domain’s records began.
dr. Nicola Powell, the estate’s head of economics and research, said there were mixed moves in the capitals, with Sydney, Canberra and Darwin rising, while Melbourne, Adelaide and Hobart moving in the opposite direction.
“As the country opens up with the first month of easing restrictions after the last lockdown, and as economic conditions improve, there will be further downward pressure on national vacancy rates,” said Dr. powell.
“The positive prospects of meeting vaccination targets, increased job security and the opening of both domestic and international travel will benefit tenants and landlords alike.”
Tight capital markets
Despite individual movements in vacancy rates, all capitals have tighter rental markets than last year, except in Canberra where conditions remained flat and Darwin where vacancy rates increased marginally.
dr. Powell said conditions in capital cities remained tighter compared to the COVID-induced peak in April 2020, except in Melbourne, which currently has a vacancy rate marginally lower than the April 2020 vacancy rate.
“This is an important turnaround given Melbourne’s exposure to international students and foreign migrants as a source of rental demand,” she said.
Two of the biggest factors driving vacancy rates in Melbourne have been the latest easing of lockdown and the move to allow onsite rental inspections – this has brought the city’s vacancy rate down to 3%.
“This downward trend, coupled with a 4.2% month-on-month decline in rental listings, could lead to Melbourne’s rental market eventually becoming that of a landlord. A real possibility once international borders reopen,” said Dr. powell.
Meanwhile, vacancy in Sydney was still at its lowest level since September 2018, despite rising slightly to 2.3% in November.
In Canberra, vacancy rates in November were higher than before the lockdown in July, possibly reflecting the jump in rental offers during the month.
Outside of these three cities, rental markets in smaller capitals remained tight, with vacancy rates still at multi-year lows in Perth, Hobart, Adelaide and Brisbane.
Photo by Amos Lee on Unsplash
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