Residential Vacancies

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<p>Vacancies have remained high in Melbourne, according to SQM Research's national residential rental vacancy report for February.</p>

<p>"Melbourne remains weighed down by underwhelming demand for rental accommodation," said Louis Christopher, managing director of SQM Research.</p>

<p>Melbourne’s vacancy rate rose from 4.4% to 4.5%</p>

<p>It was down from the 4.7% last December, which was the highest level since SQM Research started measuring data in 2005. </p>

<p>Melbourne’s vacancy rate ranks as the highest for a capital city in the nation, with the withdrawal of international student tenants hitting the city hard, Christopher noted.</p>

<p><img alt="" height="506" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/vacancy_rates_sqm.jpg" width="1378"></p>

<p>The inner Melbourne CBD vacancy rate stands at 7.5%, down from 9.4% last October.</p>

<p>Sydney’s overall vacancy rate rose 0.1% to 3.3%. </p>

<p>The Sydney CBD vacancy rate dropped to 6.3% in February 2021, down from a high of 14.8% in May 2020, indicating a return to life for Sydney city. </p>

<p>Elsewhere, in Perth, Adelaide, Canberra, Darwin and Hobart, the vacancy rate was below 1%.</p>

<p>Brisbane’s vacancy rate also remained tight, down to 1.5% in February from January 2021.</p>

<p>SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties.</p>

<p>"The figures for Melbourne and Sydney would be disappointing for existing property investors," Christopher said.</p>

<p>"Normally, vacancy rates in these two cities fall over February, in part due to international students starting their semesters.</p>

<p>"But given the ongoing closure of the international border, the seasonal increase in rental demand has not occurred this year. </p>

<p>"This year will favour tenants in the inner cities but will also very much remain a landlord’s market in regional Australia.</p>

<p>“Elsewhere, we are still recording strong interest from tenants in larger properties in outer suburban locations as well as wider regional Australia. </p>

<p>'Investment property owners in Darwin or Perth have also enjoyed a strong year of rental returns.”</p>

<p>Over the month to 12 March 2021, capital city average asking rents fell 0.4% for houses to $550 per week and 0.2% for units to $412. </p>

<p>Reflecting accommodation oversupply, Melbourne and Sydney unit asking rents fell by 1.4% and 0.4%, respectively over the past month.</p>

<p>House rents also fell in Sydney by 1.2% while Melbourne house asking rents were flat. </p>

<h2><strong>Recently listed VIC properties:</strong></h2>

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<p>[smartcode_project:default project_id=26935]</p>

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Melbourne also posted a 12% drop in asking unit asking rents over the year to March 2021

jchancellor

Melbourne rental vacancies remain high given international student absence: SQM

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<p>SQM Research has revealed the national residential rental vacancy rate increased by 0.1% over the month of December 2020. The total number of vacancies Australia-wide is now 76,658 vacant residential properties. This time last year, the national vacancy rate was higher at 2.5%.</p>

<p>The rise for the month was predominantly driven by Melbourne and to a lesser extent, Sydney. Brisbane, Perth and Hobart remained stable. While Adelaide recorded a minor decrease of 0.1% in December.</p>

<p>Melbourne’s vacancy rate increased to 4.7% in December and continues to be the highest vacancy rate in the nation. This time last year, Melbourne’s vacancy rate was low at 2.5%. Sydney’s vacancy rate increased by 0.1% to 3.6%.</p>

<p>The surplus of rental property in Melbourne and Sydney’s CBDs have declined, Melbourne CBD vacancy rate now stands at 8.7%, down from 9.1% in November. Sydney CBD vacancy rate has declined to 7.8% in December, down from 9.5% in November.</p>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/2020_vacancy_data_sqm.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="211" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/2020_vacancy_data_sqm.jpg?itok=1BaufZu8" width="580"></a>

<figcaption><em>Source: SQM Research</em></figcaption></figure><h2>Asking Rents</h2>

<p>Over the month, Capital City average asking rents decreased 0.2% for houses and 0.5% for units for the week ending 4 January 2021 to record asking rents of $539 per week for houses and $406 per week for units.</p>

<p>However the majority of capital cities recorded increases in both house and unit asking rents, with Darwin recording the highest increase of 4.1% over the month for houses and 4.0% in unit asking rents. Hobart recorded a 3.1% increase in house rents but a 3.6% decline in unit rents.</p>

<p>Sydney and Melbourne recorded declines in both house and unit asking rents over the month, 0.8% and 0.1% respectively for houses, and decreases of 0.6% and 1.9% respectively, for units rents, which weighed on the weighted results for the capital cities.</p>

<p>Canberra recorded increases in house rents of 1.4% but unit rents declined by 0.7%. Brisbane, Adelaide and Perth house and unit rents also increased over the month.</p>

<p>Year on year, capital city average asking rents declined for both houses and units – 2.7% and 7.1% respectively. Sydney in particular recording a high 10.3% decline in units and 7.6% decline in houses in December 2019. Melbourne’s asking rents also declined year on year, 4.8% for houses and 8.7% for units.</p>

<p>Darwin’s year on year house rents saw a significant 27.3% growth and Perth house rents also increased by 12.0% and units 9.3% growth over 12 months.</p>

<p>" It’s clear Sydney and Melbourne apartment investors were the losers of 2020 with rents and prices falling. However, if you owned an investment property in Darwin or Perth, or indeed regional Australia, you have had one of the best years ever," Louis Christopher, Managing Director of SQM Research summarised.</p>
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Sydney and Melbourne recorded declines in both house and unit asking rents over December, 0.8% and 0.1% respectively for houses, and decreases of 0.6% and 1.9% respectively, for units rents

urban.com.au

Melbourne & Sydney unit asking rents down over 8.5% in 2020

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<p><span style="font-size: 12.16px;">Most indicators suggest that Melbourne has moved into first place as the city creating the most jobs and growth.</span></p>
<p>That said, the New South Wales Treasurer handed down a 2017-18 Budget yesterday revealing that the state's finances are in rude health.</p>
<p>Each month I've been tracking the unprecedented stamp duty take resulting from Sydney's property boom, a gift which has kept on giving.</p>
<p>It was reported yesterday that the state beat projections in 2016-17 to hit another surplus of $4.5 billion, with NSW now in a negative net debt position, boasting a net worth totalling more than a quarter of a trillion dollars, and with enough left over to set up a $15 billion Future Fund.</p>
<p>To complete the virtuous circle the state now plans to unleash a towering $72.7 billion spend on infrastructure, incorporating an impressive range of projects, a further record $7.7 billion for health infrastructure, and $4.2 billion to build 26 new schools and to fund upgrades.</p>
<p>This is a positive move for Sydney, and the harbour city will need to get these projects moving to fill the hole left by any coming downturn in the rate of apartment building.</p>
<p>Melbourne vacancies keep falling</p>
<p>We seem to have reached an inflection point in this property cycle.</p>
<p>Lower interest rates spurred record numbers of property investors into the market since 2012.</p>
<p>But now regulators and banks are winding back interest-only loans and have introduced tougher serviceability measures and higher mortgage rates for investment products.</p>
<p>And this is at a time when demand for rentals has never been higher, with employees changing roles and locations more frequently than in times past, and a record boom in international visitors and students.</p>
<p>While the rate of dwelling construction has been impressive, I recently mused <a href="https://petewargent.blogspot.com.au/2017/06/is-sydney-heading-for-rental-crisis">here</a> whether the number of available rental properties will keep up with demand this year and next. </p>
<p>Vacancy rates declined across much of Australia in May, with the national vacancy rate dropping from 2.4 per cent to 2.2 per cent. </p>
<p>Vacancies remained super-tight in Hobart (0.6 per cent) and Canberra (1 per cent), while in Sydney the vacancy rate declined to just 1.8 per cent. </p>
<p>Vacancy rates ticked down in Brisbane, Perth, and Darwin in May, though from elevated levels in the case of Perth and Darwin, where median asking rents continue to slide. </p>
<p>In Melbourne the vacancy rate is almost in freefall, halving from more than 3 per cent at the end of 2014 to a 7-year low of just 1.5 per cent. <span style="font-size: 12.16px;"> </span></p>
<p><span style="font-size: 12.16px;">Inflation impact?</span></p>
<p>SQM's asking rents index shows rents already rising for apartments in Sydney (up 3.5 per cent over the year to June 20), and quite sharply for apartments in Melbourne (up 5.9 per cent).</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/22/SQM1-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/22/SQM1-1.jpg" alt=""></p>
<p>The vacancy rates figures suggest that rental prices may soon level off in the resources capitals, while there is mounting evidence of a tightening rental market in the two most populous capital cities. <span style="font-size: 12.16px;"> </span></p>
<p>If rents do start to rise again then this has implications for monetary policy since rents form an important part of the consumer price index (combined with rising energy prices, a strengthening rental market could be enough to scope out further rate cuts).<span style="font-size: 12.16px;"> </span></p>
<p>On the other side of the ledger, oil prices have declined to their lowest level in 9 months. </p>
<p>Overall, the figures suggested that the rental markets in the weakest cities are approaching their cyclical nadir, while most other markets ex-Brisbane are either tight or tightening. </p>
<p>Most notably, the feared oversupply in Melbourne has not materialised - if anything the number of available rentals is failing to keep pace with demand. </p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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pwargent-M4siyDbqQY

Melbourne vacancies crash to a 7-year low

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<h3 class="post-title entry-title"> </h3>
<div id="post-body-7040816109967032059" class="post-body entry-content">
<div>SQM Research reported that year-on-year vacancy rates are slightly higher.</div>
<div> </div>
<div>Sydney and Melbourne reported vacancy rates of 1.8 percent and 2 percent respectively.</div>
<div> </div>
<div>In Brisbane, where there is still a significant pipeline of inner city apartments set to hit the market, vacancy rates are 2.9 percent. </div>
<div> </div>
<div>Perth's vacancy rate was steady from the previous month at 5 percent, while the Darwin market appears to be have steadily improved with vacancy rates at 3.1 percent. </div>
<div> </div>
<div>The tightest markets are Hobart (0.6 percent) and Canberra (1.1 percent), and asking rents have increased accordingly in these cities. </div>
<div> </div>
<div><a href="/images/2016/10/19/SQM1.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="/images/2016/10/19/SQM1.jpg" alt=""></div>
<div> </div>
<div>Smoothing the data shows that over the past year vacancy rates have been relatively flat in Sydney and Melbourne, but vacancies have generally been elevated in the resources states. </div>
<br><div class="separator"><a href="/images/2016/10/19/SQM2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2016/10/19/SQM2.jpg" alt=""></div>
<div> </div>
<div>This has been reflected in soft rents in Perth and Darwin.</div>
<div> </div>
<div>Despite the apartments pipeline asking rents for units are higher year-on-year in each of the three most populous cities, particularly in Sydney (+4.4 per cent) and Melbourne (+5.1 per cent) as the new stock comes online. </div>
<div> </div>
<div>Concluded SQM Research:</div>
<div> </div>
<div><em>"Looking forward, vacancies are likely to rise in Melbourne, Brisbane and Sydney over 2017 as more new high-rise apartment developments come onto the market. </em></div>
<div><em> </em></div>
<div><em>However, we maintain that the oversupply issue appears to be constrained to concentrated areas such as the inner-city regions. </em></div>
<div><em> </em></div>
<div><em>We are not as confident we will see a contagion affect where the whole capital city market is affected."</em></div>
<div><em> </em></div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Vacancies up slightly year-on-year: Pete Wargent

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<div><span>National residential vacancies fell to 2.5% during January, with year on year results showing vacancy levels above seasonal trends, according to SQM Research.</span></div>
<div><span> </span></div>
<div><a href="/images/2016/02/17/VRJan2016.png" target="_blank">Click to enlarge</a></div>
<div>
<br><img src="/images/2016/02/17/VRJan2016.png" alt=""><br><br><span>Canberra had the largest fall, down 0.5 percentage points over the month of January, according to SQM Research managing director Louis Christopher.</span>
</div>
<div><span> </span></div>
<div><span>"Darwin and to a lesser extent Sydney, also recorded monthly falls, with Darwin vacancies falling from 4.2% in December 2015 to 3.8%. Despite this, both Darwin and Perth continue to record an alarming number of vacancies, particularly when you consider the number of vacancies recorded this time last year (January 2015)," he said.<br><br>"Overall, vacancies for January fell in line with the seasonal trends associated for this time of year. We believe the seasonality observed has much to do with the end and start of tertiary studies which normally see a significant movement of students. </span></div>
<div><span> </span></div>
<div><span>"Another trend observed in the data is the recovery of the Canberra rental market, which for about four years was in a slump. I would suggest that on the back of falling vacancy rates and rising asking rents that the rental slump is now over for the ACT."<br><br></span></div>
<div><span>According to SQM Hobart recorded the fastest rental rises for the capital cities, with asking rents rising 5.8% for houses, while units underperformed, falling by 2.3%. Average Hobart house rental is $337 a week, with units $274 a week.<br><br><br></span></div>
<div><a href="/images/2016/02/17/b3cb5918-34f8-4781-a837-6f74ce7101bc.png" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/02/17/b3cb5918-34f8-4781-a837-6f74ce7101bc.png" alt=""></span></div>
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po-LsXgBTHBmX

Falling vacancies recorded for January 2016: SQM Research

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<p><span>The number of residential vacancies nationally picked back up slightly during November, in line with seasonal trends, latest figures by property research house SQM Research show.</span></p>
<p><span>The vacancy rate was 2.3% nationally, and there were 71,737 vacancies, the data shows. </span></p>
<p><span>Vacancies appear to be following the common seasonal trends expected at this time of year, where rental accommodation tends to become more available for a variety of factors.</span></p>
<p><span>The most predominant of these is the departure of university students from their regular rental accommodation over the four-month summer break.</span></p>
<p><span>Over the last year vacancies in both Perth and Darwin have almost doubled, with November figures showing a yearly rise of 59% for Perth.</span></p>
<p><span>Most other capital cities remained stable year-on-year, with Hobart and Melbourne recording yearly declines.</span></p>
<p><span>The falls in Hobart most likely relate to the recovery in its local economy, in turn being benefited from the lower Australian dollar helping its local tourist industry, says SQM.</span></p>
<p><span>Year-on-year results for Sydney reveal a tight residential market, with a vacancy rate of 1.7% based on 10,045 vacancies in November.</span></p>
<p><a href="/images/2015/12/15/eb23b8cc-baf5-4976-8155-0351a86438d8.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/12/15/eb23b8cc-baf5-4976-8155-0351a86438d8.png" alt=""></span></p>
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