National rental market tightens over February: SQM Research
Vacancy rates across Australia were down last month with Melbourne and Canberra's markets tightening the most, according to SQM Research. Meanwhile, vacancy rates continue to escalate in Darwin and Perth.
The national vacancy rate was down to 2.2% with 66,094 vacancies, from 2.3%, with 69,847 vacancies recorded in January.
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Source: SQM Research
SQM Research attributes Melbourne's vacancy rate drop of 0.5 percentage points between January and February to workers and tertiary students commencing the year after summer holidays. The research house recorded a 2.3% vacancy rate, down from 2.8% in the previous month. At the same time last year, Melbourne's vacancy rate was at 2.4%.
The same post-holiday influx of student and workers was credited with Canberra's vacancy rate downturn, with the rate dropping from 2.0% in January to 1.6% in February. Canberra has recorded the biggest decline in its vacancy rate over the past 12 months of any capital city, with the rate at 2.1% in February 2014.
In Perth and Darwin, SQM Research managing director Louis Christopher predicts that vacancies are likely to continue to climb throughout the year. While Darwin's vacancy rate was down slightly for the month, from 3.3% to 3.2%, in February of last year it was at just 1.3%. Likewise, in Perth the vacancy rate has remained stable at 2.6% over the past two months, but is up from February 2014's 1.9% result.
However, Christopher does not think escalating vacancy rates are necessarily quarantined to Perth and Darwin.
"Ongoing weakness in commodity prices will filter through to the jobs and property markets in Perth and Darwin," says Christopher.
"Nationally, a continuation in below-trend economic activity will likely push the unemployment rate up towards 7%, which will ultimately work to keep a lid on vacancy rates and rents in other capital cities, though Sydney rents may prove more resilient, having grown at close to 8% for housing over the year to March 10, given the city's tight vacancy rate."
Of all the capital cities, Hobart has the tightest rental market, with a 1.3% vacancy rate and just 358 vacant properties in February.
