Vacancy rates tumble across capital cities as Brisbane takes top spot: SQM Research

Vacancy rates dropped across all Australian capital cities in March, falling to just 1.5% in Melbourne and 1.7% in Sydney, with upward pressure likely to be maintained on rents in the two cities, according to the latest data from SQM Research.

Overall, the national vacancy rate fell to 2.3% in March from 2.4% the previous month, based on 73,554 vacancies. 

The numbers reflect a seasonal tightening in vacancy rates. Vacancies usually drop in the early months of the year as people return to their jobs after the summer break and students go back to universities in March, according to SQM Research managing director Louis Christopher.

Among the capital cities, Hobart’s vacancy rate was the lowest at just 0.6% while Canberra had the tightest vacancy rate of 0.8%, down from 0.9% in February. In Adelaide it was 1.8%, down from 2%.

Vacancies dropped in Perth and Darwin, as well as Hobart and Brisbane, which has the most listings at 11,028 of any of the capitals.

Christopher pointed out that the vacancy rate continued to fall in Melbourne despite much talk of an apartment oversupply. 

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“Even in the spots where we would have expected to see oversupply, such as Docklands and SOUTHBANK, we are not seeing it, where there are thousands of apartments, new and old,” he said.

Reflecting its lower vacancy rate, asking rents rose in Melbourne over the month to April 12, up by 1.6% for units and 0.7% for houses. 

Annually, asking rents for houses is growing fastest in Melbourne at 7.1%, reflecting tightening vacancy rates.

Sydney unit rents too jumped by 1.6% over the month, as well as a 1.5% rise for Canberra units, though housing rents fell in those two cities.

In Sydney too, despite high levels of inner-city apartment construction, the vacancy rate is just 1.7% across the city and just 1.3% in the CBD. 

“We may, however, see a bounce in April across cities as demand for rental properties drops back,” Christopher said.

Perth recorded the highest vacancy rate at 4.7%, down marginally from 4.8% in February, followed by Darwin at 3.5%, a drop from 3.8%.

In Brisbane, the vacancy rate dipped slightly to 3.2%, and in Adelaide it fell to 1.8%. 

Darwin asking rents continued to fall, down 2.6% for houses over the month, while unit rents were down 1.1%.

Perth has again posted the largest yearly declines, with unit asking rents down 9.6% and house rents down 7.3%.