Vacancies increase across the country: SQM Research

The level of residential rental vacancies rose in November to 2.2% or 62,885 nationwide.

SQM Research has revealed that the increase breaks an ongoing trend - being the first rise after four consecutive monthly declines in residential rental vacancies nationally.

The company attributes much of this to seasonality, with large numbers of university students vacating their rental accommodation as the study year comes to a close.

However, looked at year on year, a 0.3% increase in national vacancies signals that the rental market has substantially eased since November last year.

Also of interest is that, when comparing this month’s increase to the same period in 2012 - October to November - the rise is 0.1% greater in 2013, hinting at a potential sales market recovery.

SQM Research managing director Louis Christopher says a city-by-city breakdown reveals that Darwin had the most substantial monthly rise, climbing 0.5 percentage points month-on-month.

He said this could be perceived as a pleasing result for the northern capital which has been suffering tight vacancy rates in the past 12 months. However, the rental market has loosened up lately.

Year-on-year, Perth has recorded a substantial increase - up 1.0%. Ongoing increases in vacancies can be attributed largely to the decline in mining activity.

“The national rental market has recorded a rise in vacancies for November which is normal for this time of year. It is likely as well that the December result will also rise,’’ said Christopher.

‘’Brisbane now appears to be recording a clear upward trend in vacancies. Of particular interest is what is happening with the Brisbane CBD, where, on our numbers, vacancy rates are now 4.7% and rising quickly.

‘’On the other hand, Hobart is recording a clear trend of declining vacancies, with the rate there 1.4% after continuous declines for the past six months. Investors should be fully aware of rental market conditions before making decisions in the housing market.”

SQM’s vacancy calculations are based on online rental listings advertised for three weeks or more, compared to the total number of established rental properties. The company considers this to be a superior methodology compared to using a potentially incomplete sample of agency surveys, or relying on raw online listings advertised. 

Key points

• Nationally, rental vacancies rose in November to 2.2% and to a total of 62,885 nationally.
• Melbourne has the highest vacancy rate of the capitals, at 3.0% or 13,132.
• Hobart and Adelaide have the tightest vacancy rates of the capital, both at 1.4% and a total of 385 and 2460 respectively.
• Perth had the highest yearly increase in vacancies, climbing 1.1% to 2.1% since November 2012 with 3,171 vacancies.
• Hobart had the largest yearly decline in vacancies, falling 0.8% to 1.4% since November 2012.
• Darwin had the highest monthly vacancy rate rise - up 0.5% this November to 1.5% or 356 vacancies.
• Canberra and Hobart were the only capitals to record a monthly decline, both falling 0.1% in November to record rates of 2.0% and 1.4% respectively.

staylor@propertyobserver.com.au