Melbourne rental market oversupplied: SQM Research
The Melbourne rental vacancy rate climbed from 3% to 3.4% in November with the number of properties available to rent climbing from 10,956 to 12,367, according to figures compiled by SQM Research.
The city now accounts for a quarter of the 48,244 properties available to rent nationally, with Melbourne vacancies increasing every month while the national vacancy rate remains steady.
According to SQM, Melbourne’s high levels of sale stock confirm the city is “currently undergoing an oversupply issue”.
“Coming off the building boom that occurred in 2009 and 2010, the city has many ‘newly completely’ and ‘currently being constructed’ dwellings, but unfortunately not enough demand to meet the high levels of stock available,” says SQM.
A year ago, Melbourne had a vacancy rate of 2.8%, with 10,270 properties available to rent.
Nationally the rental market remains tight though the vacancy rate eased slightly from 1.7% to 1.8%, with more than 2,300 more properties available to rent in November than there were in October.
Vacancy rates eased slightly in all the other major capital cities with the Sydney vacancy rate still remaining tight at 1.5%.
Perth remains the tightest major capital city market, with a vacancy rate of just 0.8% and just over 1,200 properties available to rent, a slight improvement from the 0.7% vacancy rate recorded in October.
Canberra was the only capital city where the vacancy rate tightened over November. Fewer than 300 properties remain available to rent in Australia’s capital city.
SQM Research managing director Louis Christopher says 2011 has been a “landlord’s market, with rents nationwide recording rises of 4.6% plus, according to the Australian Bureau of Statistics”.
“Sydney has recorded the fastest rents while Melbourne has been at the other end of the spectrum with zero rental growth, and in some areas rental declines.
“I expect 2012 to be somewhat the same with possibly another five plus per cent increase. But this again assumes that our economy stays out of recession and we don’t all get sucked up into the back hole that is Europe.
“We expect softness at the prestige end of the market because during a slowdown, discretionary spending is cut.”
Hobart recorded the largest yearly growth in rental vacancies of all capital cities, with vacancies increasing by 0.9% over the past 12 months to a total of 448 vacancies (1.9%).
Darwin has recorded the most substantial yearly falls, decreasing by 0.9% since the corresponding period of the previous year (November 2010) and coming to a total of 298 vacancies (1.3%).