australian rental market records new low vacancy rate september 2023
The Australian vacancy rate has hit a new record low. Image: The Property Tribune.
  • The national vacancy rate fell further to 1.06%.
  • It is now at a new record low.
  • More markets are forecast to record sub-1% vacancy rates next year.

Renting in Australia continues to be a tough slog as vacancy rates plummeted further in September.

According to PropTrack’s latest Market Insight, Australia’s rental vacancy rate has dropped 0.06 percentage points to the new record low of 1.06%.

The latest drop in rates brings the proportion of vacant properties to less than half (55%) of March 2020 levels.

“Rental conditions deteriorated further in September, with the proportion of rental properties sitting vacant hitting a new low,” said report author PropTrack economist, Anne Flaherty.

“Vacancy was down in both capital city and regional areas, with renters feeling the squeeze across the country.”

Rental vacancy rates for September 2023

All dwellings Vacancy rate Percentage points Change since March 2020
Monthly change Quarterly change Annual change
Sydney 1.18% -0.11 -0.37 -0.31 -63%
Melbourne 1.15% -0.06 -0.16 -0.69 -52%
Brisbane 0.86% 0.02 -0.01 0.01 -58%
Adelaide 0.65% -0.04 -0.13 -0.06 -52%
Perth 0.71% 0.01 -0.18 -0.05 -70%
Hobart 1.40% -0.13 -0.33 0.74 -2%
Darwin 1.80% 0.1 0.37 0.08 -61%
ACT 1.62% -0.11 -0.34 0.27 76%
Capital Cities 1.06% -0.05 -0.21 -0.29 -57%
Rest of NSW 1.22% -0.08 -0.32 0.13 -40%
Rest of Vic. 1.10% 0.02 -0.2 0.11 -29%
Rest of Qld 0.89% -0.06 -0.24 -0.09 -60%
Rest of SA 0.65% -0.05 -0.28 -0.02 -74%
Rest of WA 1.11% -0.14 -0.24 0.07 -66%
Rest of Tas. 1.16% -0.07 -0.38 0.23 -23%
Rest of NT 1.50% -0.49 -0.67 0.16 -58%
Regional Areas 1.06% -0.06 -0.27 0.05 -49%
National 1.06% -0.06 -0.23 -0.20 -55%

Source: PropTrack.

Currently, three Australian capital cities have sub-1% vacancy rates.

“More markets are expected to fall below 1% over the coming year as demand continues to grow,” said Flaherty.

The situation is similarly dire in parts of regional Australia:

“Across Australia’s regional areas, every state has seen vacancy fall by at least 20 percentage points over the quarter. Regional SA and Queensland are seeing the lowest vacancy, at 0.65% and 0.89% respectively.”

Anne Flaherty, PropTrack

“Declining vacancy rates are increasing competition for rentals and placing growing pressure on rents. As a result, rents are predicted to continue rising at above trend levels over the coming months, particularly in the capitals,” she added.

Cost of renting grows, but at a slower pace

Recent Domain and CoreLogic figures have indicated that rental costs continued to climb in the face of declining vacancies, but the pace has started to reduce.

Both Domain’s Nicola Powell and CoreLogic’s Tim Lawless noted the phenomenon of slowing rental growth and dwindling vacancy rates is likely due to an affordability ceiling being reached. Both cited RBA data showing the average number of people per dwelling is growing, with a possible explanation being the increase in shared housing as affordability constraints tighten.

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