Rental market stabilises as vacancy rates flat line

The national vacancy rate remains 1%
Could be a sign of a stabilising market
Most cities were also stable, bar Hobart and Canberra where there were more vacancies

The national vacancy rate, along with several state capitals have flatlined for four consecutive months. While it’s no sure sign things are getting better quite yet, data from Domain’s (ASX: DHG) recent June 2022 Vacancy Rate report seems to be showing some signs of a stabilised rental market.

Domain data highlighted the fact that while the national vacancy rate has held at the same point for four months, it is still 1.0%. It comes as no surprise it remains landlords’ market, Domain noted that “Nationally, … [the] choice of vacant rentals sits 42.2% lower annually.”

Monthly vacancy rates

	Jun-22	May-22	Jun-21	Monthly change	Annual change
National	1.0%	1.0%	1.7%	–	↓
Combined capitals	1.1%	1.1%	2.1%	–	↓
Combined regionals	0.7%	0.6%	0.7%	↑	–
Sydney	1.4%	1.4%	2.5%	–	↓
Melbourne	1.5%	1.6%	3.4%	↓	↓
Brisbane	0.6%	0.6%	1.2%	–	↓
Perth	0.6%	0.6%	0.8%	–	↓
Adelaide	0.3%	0.3%	0.5%	–	↓
Hobart	0.5%	0.4%	0.4%	↑	↑
Canberra	0.8%	0.7%	0.7%	↑	↑
Darwin	0.5%	0.5%	0.5%	–	–

Source: Domain

Melbourne was the only city to see a decrease in the vacancy rate, with Hobart and Canberra the few cities to see an increase in vacancies. Otherwise, it’s much of the same vacancy rates for the rest of the nation.

What’s next?

It’ll be an interesting market to watch over the next few months. While the report said investment activity over recent months may take some pressure off the market, returning overseas students and inward migration could throw that out of kilter.

Interest rates continue to rise, too.

The Hobart vacancy figures seem reflective of the wider residential market in the Tasmanian state capital, The Property Tribune reported in its 2022 market predictions for Hobart that the market is undergoing a cautious but confident recovery. Stock is gradually coming online, and doing so at a rate that should give investors, buyers, and renters some solace, if not confidence.

Having said that, there are ongoing concerns around whether interest rate hikes and construction cost blowouts could hinder that progress.

In Adelaide, the city is expecting a return to business as usual over the coming months for sales, but rentals will continue to be a crisis.

The Property Tribune spoke with real estate agents in Adelaide with the consensus being that the return to business as usual will include a little extra kick thanks to a very affordable market, a desirable lifestyle, and rising interest rates that could push people to make the move.

Rentals, however, will continue to be the bain of South Australia, with the vacancy rate currently 0.3%; it was 0.5% a year ago.

Brisbane is one to watch as billions flow into the city and indeed Queensland as it approaches the 2032 Olympic Games, but one thing came out on top for Brisbane’s property predictions: predictions are fraught with danger.

Finally, The Property Tribune’s property predictions for the Melbourne market, buy, buy, buy! Well, take that with a grain of salt – conditions in Melbourne are beginning to favour buyers, and curiously it’s buyer behaviour that’s also leading to the shift.

More discernment in what people want in a property means a change in the psyche is one powerful factor pushing the market in favour of the buyer, but of course, there’s more to that prediction… read on here.