Drastic Perth and Darwin vacancy changes: The weakest capital city rental markets

The latest SQM Research vacancy rate figures have found vacancy rates dipping slightly for the second consecutive month, in what is likely a seasonal trend.

Currently, the national vacancy rate is 2.1% with 62,947 vacancies. Year on year, this sees the national vacancy rate at a fairly stable figure, recording 2.0% in October 2013 and 2.2% in September 2014.

Despite the national figure remaining stable, SQM Research’s managing director Louie Christopher pointed to drastic vacancy rate changes when drilling down to the capital city levels, perhaps as a result of the falling mining boom.

For instance, Perth in October 2013 recorded a vacancy rate of 1.5%. It is now 0.9% higher.

Similarly, Darwin recorded a 0.9% vacancy rate in October 2013 and now sits at 2.1%.

Canberra has recorded a reduction in the vacancy rate from 2.1% in October 2013, and in September 2014, to 1.8% in October 2014.

“The rental market was steady over the month with the trends observed over the course of the year, continuing on in October,” said Christopher.

“We continue to see ongoing rental weakness in Perth and Darwin. Canberra is now providing signals that perhaps the worst of the rental downturn is over with a slight fall in vacancies year on year and a rise in asking rents for the month,” he said.

He noted that Sydney appears to be the strongest rental market at present, with asking rents up 6.8% for the past 12 months. However, he said that he expects this to slow in 2015 with increased stock coming onto the market for the city.

Vacancy rates (from highest to lowest):

• Melbourne
  2.5%
  

• Perth
  2.4%
  

• Brisbane
  2.2%
  
• Darwin
  2.1%
  
• Canberra
  1.8%
  

• Sydney
  1.6%
  

• Adelaide
  1.5%
  

• Hobart
  1.3%

Turn over page for SQM Research’s results on the changing rents charged across the capital cities.

Source: SQM Research