Tenants continued to face fewer rental options in the market as vacancy rates declined in November.
The latest SQM Research report showed that the number of job openings across Australia fell to 55,370 in November, representing a vacancy rate of 1.5%.
Five of the eight capitals now have a vacancy rate of less than 1%, with Hobart reaching the lowest vacancy rate at 0.3%.
Sydney maintained vacancy rates at 2.6%, but Melbourne and Brisbane declined further in the month to 3.2% and 1.3% respectively.
SQM Research director Louis Christopher said there has never been a time when so many capitals simultaneously recorded vacancy rates below 1%.
“This has translated into rising rent increases, particularly for homes where the capital gains for the year is now at 11.7%,” said Mr Christopher.
“Clearly, demand for larger properties has skyrocketed since COVID and we are not yet registering a reversal of this trend.”
However, Mr Christopher said it is likely that units will receive more attention next year given the relative affordability of the markets.
Moreover, with the borders reopening and the influx of migrants resuming, units are likely to be the first option to consider.
Impending rental crisis
Pete Wargent, co-founder of BuyersBuyers, said the rental market is likely to enter crisis zone in many regions.
“While international travel has returned to some extent, we expect to see a wave of staycations this year as Aussies fear being left out on return,” said Mr Wargent.
“Travel and flight rules are currently changing rapidly and in the coming months we expect strong growing demand for rentals in destinations such as Sunshine Coast, Gold Coast and the Northern Coast of New South Wales, among others.”
Rental markets are expected to tighten further and the year is likely to end with even lower vacancy rates.
“Everything is already packed in many of the lifestyle locations, and that will only intensify over the Christmas break.”
“Aussies have amassed a vast war trove of savings, an unprecedented $1½ trillion in cash and deposits. We have seen the renovations blossom; after that comes the staycation boom,” said Mr Wargent.
BuyersBuyers CEO Doron Peleg said another factor driving down vacancy rates is the fact that more Australians have already bought their second homes, while regulation has incrementally shifted in favor of tenants.
“As international students return and new migrants begin to arrive again, and eventually tourists, we can expect rental vacancies in many suburban and regional locations to drop to record levels,” said Mr Peleg.
“CBD vacancy rates are still high in Sydney and Melbourne, and some areas still have high supply of new apartments, as documented in our quarterly oversupply report.
“But overall, we expect tight rental markets to continue into 2022 as immigration comes back online, and that’s already being reflected in five of the eight capitals that are posting vacancy rates below 1 percent for the first time.”
Photo by Samuel Holt on Unsplash.
Top Suburbs: Canterbury, Tweed Heads South, North Lambton, Whyalla, The Basin
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