Perth has highest rental vacancy rate at 4.4%, but down from 5.1% a year ago last January
Data released by SQM Research calculates the national residential vacancy rate fell to 2.3% in January 2018, with the number of vacancies Australia-wide falling to 74,113, down from 2.5% in December 2017, as renters secured homes for the start of the new year.
In the big cities, Melbourne’s vacancy rate dropped to 1.8% from 2.1% while Sydney’s dropped to 2.3% from 2.6%. But that vacancy rate is still up from 1.9% a year earlier, reflecting slightly easier rental conditions in Sydney. The vacancy rate dropped in Canberra to 0.9% down from 1.3% in December.
Hobart's vacancy rate hovered just above a record low at 0.4%, reflecting a severe shortage of rental properties in that city.
City | January 2017 Vacancies | Vacancy Rate | December 2017 Vacancies | Vacancy Rate | January 2018 Vacancies | Vacancy Rate |
Adelaide | 3,375 | 1.9% | 2,772 | 1.5% | 2,793 | 1.5% |
Perth | 9,953 | 5.1% | 9,264 | 4.6% | 8,909 | 4.4% |
10,170 | 1.9% | 11,478 | 2.1% | 9,744 | 1.8% | |
Brisbane | 11,314 | 3.6% | 12,240 | 3.8% | 11,505 | 3.6% |
Canberra | 621 | 1.0% | 807 | 1.3% | 569 | 0.9% |
Sydney | 12,228 | 1.9% | 17,404 | 2.6% | 15,775 | 2.3% |
Darwin | 1,086 | 3.7% | 1,035 | 3.5% | 941 | 3.1% |
Hobart | 186 | 0.6% | 96 | 0.3% | 126 | 0.4% |
National | 78,364 | 2.5% | 80,092 | 2.5% | 74,113 | 2.3% |
Elsewhere, the vacancy dropped in Perth to 4.4% from 4.6% in December, but it is still the highest of any capital city. Darwin’s vacancy rate fell to 3.1% from 3.5% over the month as the surplus of rental properties eases in that city.
Managing Director of SQM Research, Louis Christopher, said the vacancy numbers highlighted tighter rental markets in most capital cities, which was to be expected in the first month of the year as renters found new rental homes.
“We’ve seen falls across all cities, as students prepare for their first semester of study and lease new homes, and workers also secure new rentals, especially in Canberra which has a transient workforce and Sydney too. We are seeing very tight rental conditions in Hobart, which is putting strong upward pressure on rents.
“While Sydney’s vacancy rate has dropped, it is still well up on levels this time last year. If the vacancy rate holds at this level in coming months, Sydney will be more of a tenant’s market in 2018 and rental growth could continue to ease,” Christopher said.
Capital city asking rents over the month to 20 February 2018 rose 0.2% to $562 a week for houses. Unit asking rents rose 0.5% to $443 a week. Over the year, asking house rents rose by 1.3% while asking rents for units increased by 2.8%.
Reflecting a shortage of rental properties, asking rents rose the most in Hobart over the month, by 5.1% and 5.3% for houses and units, respectively.
The asking rent for a three-bedroom house in Sydney remains the highest in the nation at $745 a week while for units it stands at $525. Canberra follows at $616 a week for houses and $436 for units. Asking rents for houses rose in Melbourne by 0.4% over the month to $528 while unit asking rents rose 1.2% over the month to $402 a week.
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.
New reiwa.com data suggests Perth’s rental market has stabilised.
REIWA President Hayden Groves said results for the December 2017 quarter suggests Perth’s rental market officially found its floor in 2017.
“After a prolonged period of falling rents, soaring listings and record high vacancy rates, the market has strengthened. The December 2017 quarter results signal a stable market, which is welcome news for landlords and property investors,” Mr Groves said.
Perth’s overall median rent price remained at $350 per week during the December 2017 quarter.
Mr Groves said this was the third consecutive quarter Perth’s median rent price has held at $350 per week.
“Perth’s median rent stabilised considerably in 2017. Where rents were once declining every quarter, we’ve now observed nine months of steady prices,” Mr Groves said.
On an annual basis, reiwa.com data shows the median rent declined $10 per week.
“Although there was a small decline between the December 2017 and December 2016 quarters, this is still a significant improvement on the year prior when Perth’s overall median rent declined $40 per week between the December 2016 quarter and the December 2015 quarter.
"Annually, the rate of decline has slowed considerably which is pleasing,” Mr Groves said.
While the overall median rent price is stable, reiwa.com data shows a number of suburbs saw an improvement in rent prices over the quarter.
“The top five suburbs for median rent price growth in the December 2017 quarter were Mindarie ($565 per week), Attadale ($455 per week), Bicton ($370 per week), Shelley ($430 per week) and Shoalwater ($295 per week),” Mr Groves said.
There were 13,555 rental properties leased in the December 2017 quarter.
“Despite the traditional lull of the festive season, leasing activity only declined 1.6 per cent during the December 2017 quarter. Tenants remain very active and it’s good to see that leasing activity hold up well throughout the holiday season,” Mr Groves said.
Madeley, Kingsley, Inglewood, Piara Waters and Cooloongup had the biggest improvement in leasing activity volumes in the December 2017 quarter.
There were 8,912 properties for rent in Perth at the end of the December 2017 quarter.
Mr Groves said rental listings in Perth have declined substantially since their peak of 11,300 in 2016.
“Listings have declined 8.4 per cent on a quarterly basis and are down 13.9 per cent compared to the December 2016 quarter.
“These considerable declines are likely due to new dwelling commencements slowing which has resulted in stock being soaked up. Another contributing factor is the improvement in population growth into the state, which lifted to 0.84 per cent in the year to June 2017. The rental market is generally the first place to feel the effect of population growth, as new entrants into the state soak up rental stock first,” Mr Groves said.
Average leasing days
It took 49 days on average to find a tenant in the December quarter - five days faster than it did in the September 2017 quarter.
Mr Groves said average leasing days had also improved by three days compared to the December 2016 quarter.
“Healthy leasing activity and declining listings has increased demand, which means tenants are needing to act faster to secure a rental. It also shows landlords are listening to the advice of their property managers and pricing their properties competitively from the start,” Mr Groves said.
Perth’s December 2017 quarter vacancy rate is 5.5 per cent - the lowest level since the September 2015 quarter.
Perth’s vacancy rate is the lowest it has been in more than two years. It is now down from 6.9 per cent in the September 2017 quarter and from 6.4 per in the December 2016 quarter, which is significant” Mr Groves said.