Residential Vacancy

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<p>One of the most consistent linkages in real estate is that the cities with the tightest vacancies are the ones showing the best rental growth.</p>
<p>This, of course, is no great surprise but real estate data often makes no sense. This is one instance where it does.</p>
<p>The figures on rentals and vacancies are among the most consistent in the real estate research field - and it’s an area where competing research sources generally agree with one another, a lot more often than they do on median prices and the level of price growth.</p>
<p>Domain and SQM Research, for example, have comparable figures on vacancy rates in each of the capital cities and also on rental growth.</p>
<p>The two sources broadly agree that the tightest rental markets are found in Hobart (vacancies around 0.5%), Canberra (1.2%) and Melbourne (1.5%).</p>
<p>The highest vacancy rates are in Perth (4% to 5%), and in Brisbane and Darwin (both around 3%).</p>
<p>The respective vacancy situations correlate closely with annual growth in house rentals.</p>
<p>SQM Research says Hobart house rents have grown 8% in the past year, while both sources record 6-7% growth in Canberra and around 5% in Melbourne.</p>
<p>Meanwhile, the city with the highest vacancies, Perth, has the worst rental performance: SQM says house rents have dropped almost 6% in the past year while Domain records a decrease of more than 7%.</p>
<p>Darwin house rents have dropped 5.5%, according to both sources, while both say Brisbane rents are unchanged.</p>
<p>In most of the major cities, vacancy rates are higher for apartments than they are for houses - and this, too, is reflected in rental performance.</p>
<p>Both Domain and SQM record double-digit growth for apartment rents in Hobart and around 5% increases in Canberra and Melbourne.</p>
<p>In Brisbane, where inner-city oversupply is a growing issue, apartment rents are down about 1% overall.</p>
<p>In Perth, where vacancy rates generally are high but especially in the inner-city unit markets, apartment rents have fallen 7% (SQM) or 10% (Domain).</p>
<p>In Darwin, where unit oversupply has been an issue as well, apartment rents are down 8-9% in annual terms.</p>
<p>The overall impression from all the figures is that rents have not matched prices in growth performance, which has resulted in rental yields contracting in most cities.</p>
<p>The only city with a gross rental yield for houses above 5% is Hobart, which sits at 5.4% according to Domain. </p>
<p class="p1"><span class="s1">Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank"><span class="s2">hotspotting.com.au</span></a>. You can <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'" target="_blank"><span class="s2">email him</span></a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank"><span class="s2">Twitter.</span></a></span></p>
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Tightest rental markets in Hobart, Canberra and Melbourne: Terry Ryder

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<div>EXPERT OBSERVER</div>
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<div>Despite the high rates of apartment construction, strong population growth continues to absorb the rental stock.<br><br>The total number of rental vacancies in Australia has declined over the past year from 75,733 to 72,748, according to the latest figures from SQM Research.<br><br>This represents a decline from in the national vacancy rate from 2.4 per cent to 2.2 per cent - while construction is now set to slow.</div>
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<div>SQM reported that Brisbane continues to experience a sustained 2018 decline in vacancy rates from 3.6 per cent in December to 2.9 per cent by July.<br><br>And this will likely continue as apartment construction falls away and migration from interstate picks up. </div>
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<div>Perth is also now through the worst with vacancy rates trending down (from 5.2 per cent to 4 per cent over the past year) and the oversupply of rentals easing a bit, after several years of rental price declines.<br><br>Meanwhile Adelaide tightened again into just 1.3 per cent - getting pretty tight down there now! - and Canberra...well, Canberra is heading for zero at this rate.<br><br><strong>Sydney indigestion</strong>
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<div>In Sydney number of vacancies was down from 19,572 to 19,114 in the month - a tight rental market would be represented by more like 12,000 vacancies or fewer - but year-on-year the vacancy rate is considerably higher at 2.8 per cent. </div>
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<div>Click <a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank">here</a> to enlarge</div>
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<div><a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable"><img src="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s640/SQM1.jpg" width="640" height="356" data-imagetype="External"></a></div>
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<div>Sydney tends to be a much busier place in summer these days, so this trend will be one to watch with interest.</div>
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<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
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Sustained decline in Brisbane rental vacancies: Pete Wargent 

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<p>Sydney residential rental vacancies remain steady at 1.7 percent for the third month in a row according to the Real Estate Institute of New South Wales.</p>
<p>REINSW President John Cunningham said the April 2016 REINSW Vacancy Rate Survey <span style="line-height: 1.3em;">again saw Inner Sydney rental accommodation unchanged at 1.3 percent.</span></p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-18%20at%203.14.31%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/05/18/Screen%20Shot%202016-05-18%20at%203.14.31%20PM.png" alt=""></span></p>
<p>“Middle Sydney was down 0.3 per cent at 1.6 per cent, while Outer Sydney rose 0.1 percent to <span style="line-height: 1.3em;">1.9 percent,” he said.</span></p>
<p>“Low vacancy rates highlight the shortage of properties in high demand areas. This trend is <span style="line-height: 1.3em;">expected to continue into the winter months.</span></p>
<p><span style="line-height: 1.3em;">“Properties are leasing well and in quick time frames in Newcastle."</span></p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-18%20at%203.14.37%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/05/18/Screen%20Shot%202016-05-18%20at%203.14.37%20PM.png" alt=""></span></p>
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 Sydney residential rental vacancies steady: REINSW

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<p>SQM Research has calculated the national residential vacancy rate was 2.1% in October, with the number of vacancies Australia-wide falling to 67,781.</p>
<p>It was a slight drop on September.</p>
<p>Hobart's vacancy rate fell to a record low of 0.3%, the lowest since SQM started recording data in 2005. </p>
<p>In Adelaide, the vacancy rate dropped to 1.4% from 1.6% in September and down from 2% a year earlier.</p>
<p>In Canberra, the vacancy rate dropped to 0.8% from 1.0% in September.</p>
<p>In the bigger cities, vacancies fell in Sydney to 12,435 in October, down from 13,114 in September, giving a vacancy rate of 1.9%, down from 2.1% the previous month.  In Melbourne, the vacancy rate fell to 1.8% with 9,390 rental properties available.</p>
<p>Click <a href="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/298d5ea0-09c4-42e3-8c4b-21e4e5134c6a.png" target="_blank">here to enlarge</a>.</p>
<p><img src="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/298d5ea0-09c4-42e3-8c4b-21e4e5134c6a.png" width="620" height="114"></p>
<p>Elsewhere, the vacancy dropped in Perth to 4.1% from 4.5% in October, but is still the highest of any capital city. </p>
<p>Darwin’s vacancy rate fell from 2.7% to 2.5% over the month.</p>
<p>The vacancy numbers highlighted tighter rental markets in many capital cities.</p>
<p>"We’ve seen big falls in Perth and Adelaide and even Brisbane appears to be recording a slight trend downwards right now," SQM's Louis Christopher said.</p>
<p>"However, we expect vacancies to rise in November and December due to seasonality such as students finishing up their semester and heading home, which may take some pressure off rents."</p>
<p>In Hobart, the shortage of rental accommodation is the most severe, with just 75 properties available for rent in October, prompting a record low vacancy rate of 0.3% and higher asking rents, especially for units which were up 7.9% over the month to 12 November.</p>
<p>Capital city asking rents over the month to 12 November fell 0.4% to $548 a week for houses. Unit asking rents rose 0.2% to $439 a week. Asking house rents jumped the most in Canberra by 2.6% over the month while asking rents for units jumped the most in Hobart by 7.9%. </p>
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