- The national vacancy rate fell further to 0,8%.
- It is a record low for the second month in a row.
- 40,000 to 70,000 rentals are needed to restore balance to the market.
Australian renters continue to draw the short straw as vacancy rates fell further in October.
According to Domain‘s latest Vacancy Rates Report October 2023, Australia’s vacancy rate has dropped further to a dismal 0.8%.
“The vacancy rate has held at this record low for the second consecutive month, with strong overseas migration and higher property prices pressurising demand at a time rental properties are chronically undersupplied,” said report author Domain chief of research and economics, Dr Nicola Powell.
“Dwindling rental stock has visibly suffered because of a lack of investor activity, ongoing development undersupply and higher construction costs.”
Rental vacancy rates for October 2023
|Oct – 23||Sep – 23||Oct – 22|
Rental listings at all-time low
Due to a decrease in available rental across all major cities, with the exception of Darwin, the number of vacant rental listings is also at an all time low, according to Powell.
She added that an additional 40,000 to 70,000 rentals are needed to restore balance to the rental market and achieve the healthy vacancy rate of 2 to 3% in Australia.
As far as affordability challenges, Powell said there is no quick fix, but it is crucial that policies are implemented to encourage investors to enter the market.
“There has been a rebound in new investor lending this year, however, it is not likely to be enough to improve stock levels.”
Indeed. Kusher also noted that a number of investor-owned properties continue to be sold, keeping the overall stock of rental properties low.
“It appears unlikely that there will be any imminent relief from the tough rental market conditions in the major capital cities.
“We expect supply to remain tight and demand to stay persistently strong, which is likely to push rents higher.”
Darwin and Brisbane’s rise
Darwin and Brisbane are two cities to have recorded a rise in vacancy rates this month, with Brisbane sitting at 0.8%, up from 0.,7%, and Darwin’s rate leaping to 1.2%, the largest monthly change of all the capital cities.
Powell noted that Brisbane’s tiny movement indicates the rental market there is stabilising and shifting away from highly competitive conditions seen in February.
Perth holds steady
Perth’s vacancy rate held steady for the third consecutive month in a row, at 0.3%.
“It is one of the two most competitive cities for potential tenants,” Powell noted.
“Rental supply is at an all-time low, emphasising the need for a significant boost in supply to see a change in these tight conditions.”