- Vacancy rate rose 2.1% over March, up from 2.0% in February
- First time since 2007 that vacancy rates rose for March compared to February
- CBD vacancy rates continue to recover after double digits last year
According to SQM Research, the national residential vacancy rate rose 2.1% over the month of March, up from 2.0% in February.
The rise in vacancy rates is abnormal for March. It is the first time since 2007 that vacancy rates rose for March compared to February.
The rise was driven by increases in vacancies in Sydney (from 3.3% to 3.4%) as well as a reversal in some of the tight rental markets in regional Australia.
CBD vacancy rates for Melbourne and Sydney remain elevated at 8.3% and 6.2% respectively. However, these figures are down from double digits last year.
Elsewhere in Perth, Adelaide, Canberra, Darwin, and Hobart, the vacancy rates remained below 1.0%.
“Vacancy rates remain very tight in Australia’s cities excluding Sydney and Melbourne and this is creating a surge in rents in Perth, Adelaide, and Brisbane,” commented Louis Christopher, Managing Director of SQM Research.
“However, vacancy rates for Melbourne and Sydney remain elevated. The loss of international student tenants due to COVID-19 has hit both cities hard and the ongoing high rate of dwelling completions keeps these rental markets in surplus.”
“That said we are seeing increasing signs that the absolute worse for CBD landlords has passed.”
Louis Christopher, Managing Director of SQM Research
Capital city rents rose 1.3% for houses to $557 per week but fell 0.2% to $411 for units.
Oversupply of rental accommodation in Melbourne and Sydney has caused downward pressure on rents by 1.4% and 0.4% respectively.
Meanwhile, house rents rose in Adelaide, Perth, and Brisbane by over 2.0%, indicating strong growth in smaller cities.
There are now 72,436 vacancies overall in March, up 892 from February.