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.

You May Also Like

Do Australia’s latest auction figures show a return to a balanced market?

Clearance rates across the combined capitals dipped to 59.8%, the fifth consecutive month of decline.

Australia’s housing market hints at turnaround as November sees slowest monthly gain in home values

Australia’s housing market signals potential turnaround as November sees its slowest monthly growth since February, recording 0.6% rise.

Perth property market predictions 2024 – House price & rental forecast

Experts deliver their take on what 2024 holds for Perth’s property market – predictions for capital growth range from 10 to 15 per cent.

Australian house prices soared to new record highs in November despite the cash rate rise

Home values lifted 0.22% MoM, with the national median now $761,000.

Experts Corner by The Property Tribune

Ko & NPA partner to launch several co-owned luxury properties at Mermaid Beach, Gold Coast

Ko's partnership with NPA Projects provides more opportunities to co-own off-the-plan holiday residences, including exclusive Gold Coast properties

Continue reading

Top Articles

Expert tips on how to be a successful property investor

Property expert and buyer's agent, Lloyd Edge, shares his insights.

Australian commercial property update: Industrial and tourism assets lead the pack in trying times

Commercial assets have faced volatility recently, driven by financing changes and demand fluctuations from institutions and funds.

WA has emerged as a property investment hub, and why that's a good thing

Eastern investors chase Perth's affordability, doubling the distance between home and investment in 2023, reveals MCG research.