Vacancy Rate

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<p>SQM Research has calculated the national residential rental vacancy rate decreased sightly in January, with all mainland capital cities recording falls in vacancies in January.</p>

<p>SQM Research noted that there are now less vacancies compared to last January – just prior to the first outbreak of Covid-19 in Australia. </p>

<p>But CBD rental vacancy rates in both Sydney and Melbourne remain elevated, despite recent falls. </p>

<p>Melbourne’s overall vacancy rate decreased from 4.7% in December 2020 to stand at 4.4%,  the highest vacancy rate for any of the capitals.</p>

<p>This time last year, Melbourne’s vacancy rate was low at 2.1%. </p>

<p>Sydney also recorded a fall in vacancies over January with the rental vacancy rate sitting at 3.2%, assisted by sharp falls in the CBD rental market where vacancy rates are down to 6.2% after being as high as 16% in May last year. </p>

<p>“We remain of the view that there will not be a complete reversal of the sharp rise in rental vacancy rates experienced in these locations,” SQM’s Louis Christopher said.</p>

<p>“Demand for inner city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns. </p>

<p>“This will mean 2021 will remain largely a tenant’s market in the inner cities but will also very much remain a landlord’s market for regional Australia.” </p>

<p><img alt="" height="592" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/sqm_vacancy_rates.jpg" width="1200"></p>

<p>Landlords in capital city are seeking slightly higher asking rents, up 0.7% for both houses and units to $552 per week for houses and $413 per week for units.  </p>

<p>Sydney had the highest increase of 3.2% in asking rents for houses and 2.2% in unit asking rents.  </p>

<p>“This is the first significant rise for Sydney since February 2020,” SQM’s Louis Christopher who pointed out 12-month rents are still in the negative by 6.3% (houses) and 8.9% (units) respectively. </p>

<p>Melbourne continued to record declines in both house and unit asking rents over the month, falling by 0.1% and 0.4% respectively.  Interestingly, rents slightly rose in the CBD for units, a sign that the worse could be over for CBD landlords. </p>

<p>Canberra recorded increases in house rents of 2.8% and unit rents increased by 2.7%. Perth house and unit rents also increased over the month.  </p>

<p><img alt="" height="1011" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/sqm_weekly_rents.jpg" width="1200"></p>

<p> </p>
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jchancellor

Find out what happened to the national vacancy rate in January

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<p><span>GUEST OBSERVER</span></p>
<p><span>In March this year, investigation from the City Futures Research Centre at the University of New South Wales suggested that vacant properties across Sydney were constricting supply and adding to unaffordability.</span></p>
<p><span>The number of unoccupied dwellings in Sydney was derived from 2011 Census data, and researchers found that approximately 120,000 dwellings across Sydney were unoccupied on the night of the Census. It was also found that a higher concentration of vacant properties were found in inner-city suburbs, where rental yields are low.</span></p>
<p><span>The study concluded that the ability to negatively gear investment properties and receive large capital gains tax concessions incentivised investors to hold properties empty. This would explain why vacancies were higher where the capital gains on an untouched property exceeded the benefit of renting it out.</span></p>
<p><span>However, the evidence found may not support this conclusion, partly because properties have to be rented out or at least available for rent in order to receive benefits from negative gearing.</span></p>
<p><span>Representatives from the real estate sector claimed that the figure of vacant properties and its impact on affordability was overstated, as the data did not take into account properties that were vacant because they were on the market and people were in between moving homes. However, Residex data shows that on the night of the Census, there were approximately 6,100 properties listed for rent and approximately 14,200 properties listed for sale in Sydney. Listed properties are not necessarily vacant, but assuming they are, this would account for just 17% of the vacant properties estimated across the greater Sydney region on Census night.</span></p>
<p><span>It would seem that market activity cannot account for the majority of the vacant properties in Sydney’s metropolitan.</span></p>
<p><span><em>Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here.</a></em></span></p>
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jchancellor-FAypfDUnLy

Vacant properties: are the figures overstated? Onthehouse.com.au's Eliza Owen

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<h3 class="post-title entry-title"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.15999984741211px;">SQM Research reported that vacancy rates fell across most capital cities in the month of August 2017.</span></h3>
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<div>The national vacancy rate of 2.2 per cent was marginally lower than the 2.3 per cent seen at the same time in the prior year. </div>
<div> </div>
<div>Melbourne (1.7 per cent) and Hobart (0.4 per cent) in particular are seeing sharp increases in median asking rents, while the vacancy rate in Adelaide was down to just 1.6 per cent from 1.9 per cent a year earlier.</div>
<div> </div>
<div>In fact, Hobart has the lowest vacancy rate on record for any capital city, and both rents and prices are exploding higher.  </div>
<br><div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/09/21/SQM1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><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/2017/09/21/SQM1.jpg" alt=""></div>
<div> </div>
<div>Vacancy rates ticked down from July in Brisbane (3.1 per cent) and Perth (4.6 per cent) in August.</div>
<div> </div>
<div>The rental market Perth needs to improve for landlords - median asking rents are some 34 per cent lower than at their peak according to SQM's asking rents index. </div>
<div> </div>
<div>Meanwhile Darwin has recorded seven consecutive declines in its vacancy rate, suggesting that the rental downturn may finally be over in the Northern Territory. </div>
<div> </div>
<div>Smoothing the last 6 months of figures suggests that the rental market is not deteriorating significantly in most capital cities. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/09/21/SQM2.jpg" target="_blank">Click to enlarge</a></div>
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<div class="post-body entry-content"> </div>
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<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/2017/09/21/SQM2.jpg" alt=""><br><div class="separator"> </div>
<span><br></span><span>Dwelling completions are expected to peak in early 2018, while immigration has picked up a notch.</span><br><span><br></span><span>SQM's Managing Director, Louis Christopher, noted:</span><br><div><strong> </strong></div>
<div>"We believe rents will likely rise at a faster pace 2018 than what has been recorded in 2017, thus far. </div>
<div> </div>
<div>We now have mounting concerns for significant rental shortages in 2019 in Sydney and Melbourne”.<br><br><span style="text-decoration: underline;">The delinquents</span><br><strong><span><em><br></em></span></strong>There is some correlation here with the performance in mortgage delinquencies.<br><br>Moody's reported that, by the month of May, 30 plus day delinquencies in Melbourne had declined to just 1.35 per cent, and in booming Hobart arrears had fallen very sharply to just 1.45 per cent.<br><br>In Sydney, the 30-plus delinquency rate was as low as 0.84 per cent, which is as low as we will ever see for Sydney as a city of more than 5 million persons, while the ACT had a reported delinquency rate of just 0.90 per cent.<br><br>On the other hand delinquency rates increased to 2.20 per cent in Adelaide, 2.66 per cent in Perth, and 2.82 per cent in Darwin.<br><br>And helping to tick 30-plus arrears slightly higher year-on-year from 1.50 per cent to 1.62 per cent, delinquencies were higher in the regional markets of all of the resources states and territories, including South Australia.</div>
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<a href="https://www.propertyobserver.com.au/images/2017/09/21/MOODYS.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><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/2017/09/21/MOODYS.jpg" alt=""></div>
<br>Despite these increases, thanks to the Sydney and Melbourne weighting nationally delinquency rates remain well below the levels seen in 2011 and 2012 of 1.87 per cent and 1.81 per cent respectively.</div>
<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

SQM sees rental shortages by 2019 

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<p>SQM Research released its latest vacancies and asking rents figures up to October 2015, which showed vacancy rates steady across much of the east coast but rising in the resources capitals. <br> <br>Reported vacancy rates were steady in Brisbane (2.6%) and Adelaide (1.9%), while Canberra (2.1%) saw a slight decline.<br> <br>The vacancy rate in Sydney declined to 1.6%, which has been reflected in moderately rising asking rents for houses (+1.9%) and units (+3.1%) over the year, although the rents figures may mask divergent trends at the sub-regional level.<br> <br>While both Melbourne (2.4%) and Hobart (1.1%) saw vacancy rates ticking up in October, over the past year both have recorded declines, and as such asking rents have been rising solidly in these cities too. </p>
<p>Click to enlarge</p>
<p><img src="/images/2015/11/18/Screen%20Shot%202015-11-19%20at%2010.43.38%20AM.png" alt=""></p>
<p>Resources woes</p>
<p>On the other hand vacancy rates rose further still in Perth (3.8%) and Darwin (3.5%).</p>
<p>Asking rents for houses in Darwin have tanked by more than 20% over the past year according to SQM, with Darwin set for a significant price correction.</p>
<p>Asking rents are down for houses in Perth too (-6.4%), albeit by a less dramatic margin.</p>
<p>Perth has reportedly seen the price of premium property fall sharply this year, although prices at the bottom end of the market have not shifted too much to date.</p>
<p>Perth will become an attractive buyers' market again in time, but most data - including the iron ore price which was walloped by another 4.5% overnight to be down by a stonking 76% since 2011 and 36% this calendar year alone - suggests that this time is not yet upon us!</p>
<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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Vacancy rates a mixed bag: Pete Wargent

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<p>As expected SQM Research's figures showed vacancy rates declining in August in every capital city, and rents jumping in the big cities. </p>
<p>Hobart's vacancy rate fell to just 0.5 percent, while both Sydney (1.7 percent) and Melbourne tightened (1.9 percent) despite talk of an oversupply.</p>
<p>Asking rents for units were up by +4.5 percent in Melbourne and +4.0 percent over the year to August, suggesting that "landlords are in control of the market" according to SQM. </p>
<p>Vacancy rates also declined in August in Brisbane, Adelaide, Perth, Darwin, and Canberra. </p>
<p><a href="/images/2016/09/23/SQM1.jpg" target="_blank">Click to enlarge</a></p>
<div id="x_post-body-4621751620857808479" class="x_post-body x_entry-content">
<div class="x_separator"><img src="/images/2016/09/23/SQM1.jpg" alt=""></div>
<div> </div>
<div>Smoothing the data on a 4mMA basis shows that Canberra's market has also tightened substantially, with asking rents soaring by +12 percent. </div>
<div> </div>
<div>The smoothed figures show that Darwin is on the mend, but Perth still has a 5 percent vacancy rate to chew through before rents can rise again. </div>
<div> </div>
<div><a href="/images/2016/09/23/SQM2.jpg" target="_blank">Click to enlarge</a></div>
<div> <img src="/images/2016/09/23/SQM2.jpg" alt="">
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<br>According to Louis Christopher of SQM Research:<br><br><div><em>"Sydney is likely to remain a landlords' market, as the city's growing population creates demand for new stock".</em></div>
<div> </div>
<div>Only in one sub-region of Sydney has SQM recorded an increase in advertised vacancies. </div>
<div> </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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Vacancy rates drop everywhere, big city rents jump

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<div>More interesting trends reported today by SQM Research for the month of April 2016.</div>
<div> </div>
<div>Over the past year Melbourne's reported vacancy rate declined from 2.2 per cent to 2.1 per cent, while in Sydney the reported vacancy rate has fallen from from 1.8 per cent to 1.7 per cent.</div>
<div> </div>
<div>At the other end of the spectrum, Perth reached a new cyclical high of 4.6 per cent suggesting that the bottom for the Western Australian capital may not yet be in, although lower interest rates may well help to support prices. </div>
<div> </div>
<div>In Perth both median house (-8.4 per cent) and unit (-9,3 per cent) asking rents have declined over the past year, although actual dwelling price declines have been modest. </div>
<div> </div>
<div>Asking rents are also down for Darwin houses (-8.4 per cent) and units (-12.5 per cent).</div>
<div> </div>
<div>On the other hand median asking unit rents increased year-on-year or both Sydney (+5 per cent) and Melbourne (+4.1 per cent), while in Brisbane the increase was more modest (+1.3 per cent).</div>
<p><a href="/images/2016/05/18/SQM.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/05/18/SQM.jpg" alt=""></div>
<p> </p>
<div>Since month to month vacancy rates can move around a bit, I've smoothed the data below on a 4mMA basis (arguably I should also be applying a seasonal factor, but I haven't so...shucks).</div>
<div> </div>
<div>This chart gives an interesting perspective on recent trends, although the Christmas period can be a bit of a distortion.</div>
<div> </div>
<div><a href="/images/2016/05/18/SQM2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/05/18/SQM2.jpg" alt=""></div>
<p><br><span>Fascinating stuff.</span></p>
<div>In most capital cities vacancy rates have declined over the past year.</div>
<div> </div>
<div>In Sydney demand has marginally outstripped supply. Even in apartment construction hotspots such as Green Square vacancy rates have reportedly fallen sharply from 3.5 per cent this time last year to just 1 per cent.</div>
<div> </div>
<div>Now sure, you might question the measurement criteria (where a new block of units is constructed only a sample of apartments might be advertised for rent, for example), but aren't the measurement criteria measuring like-for-like figures?</div>
<div> </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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