Australia's vacancy rate fell
Australia’s vacancy rate fell even further in October. Image: Canva.
  • 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
National 0.8% 0.8% 0.8%
Combined Capitals 0.8% 0.8% 0.8%
Combined Regionals 0.8% 0.8% 0.7%
Sydney 0.9% 0.9% 1.0%
Melbourne 0.9% 0.9% 1.2%
Brisbane 0.8% 0.7% 0.6%
Perth 0.3% 0.3% 0.3%
Adelaide 0.3% 0.3% 0.2%
Hobart 0.9% 1.0% 0.3%
Canberra 1.6% 1.6% 1.0%
Darwin 1.2% 0.7% 0.9%

Source: Domain

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.

PropTrack director of economic research, Cameron Kusher, said there is a heightened number of investors exiting 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.”


You May Also Like

When will Australian property prices fall? One major challenge continues to prop prices up

Property prices are up by over 35% across the country since Covid, and while not the same story in each city, that’s little solace to prospective buyers pulling their hair out.

A window of opportunity could be open for savvy Australian property investors, but time is ticking

One expert has noticed investors are on the move while there’s less competition and fewer buyers in the marketplace.

Why Aussie property buyers aren’t waiting for rate cuts anymore

A surge in home loans shows buyers aren’t waiting for interest rates to drop before taking the plunge.

How population density is reshaping Australian cities

Explore the relationship between population density and housing trends.

Top Articles

PropertyGuru Asia Property Awards (Australia) returns for its 7th edition, including several brand new award ...

This year's awards include several brand new categories, with entries closing 2 August 2024.

Rentvesting in Australia: A deep dive

Rentvesting offers an alternative path into the property market for priced-out first-time buyers.

Housing crisis survival guide: How to buy your first Australian property

Three property experts give the low down on how to nab a home in this tough housing market.