Melbourne vacancy rates fall: a sign the worse is over for landlords: SQM

SQM advise vacancy rates fell in Melbourne in a sign the worst is over for Melbourne landlords

Melbourne vacancy rates fall: a sign the worse is over for landlords: SQM
Melbourne vacancy rates fall: a sign the worse is over for landlords: SQM

Figures released by SQM Research reveal national residential rental vacancy rates rose in March 2021 to 2.1%, but vacancy rates fell in Melbourne in a sign the worse is over for Melbourne landlords. 

SQM's Louis Christoper noted Sydney and a number of regional localities saw the increases.

The total number of vacancies Australia-wide is 72,436 residential properties.

"The rise in vacancy rates is abnormal for March.

"It is the first time in since 2007 vacancy rates rose for March compared to February. 

"The rise was driven by increases in vacancies in Sydney as well as a reversal in some of the tight rental markets of regional Australia," he said.

Melbourne vacancy rates fall: a sign the worse is over for landlords: SQM

But Melbourne’s vacancy rate slipped to 4.4% in March from 4.5% in February, 

Elsewhere, in Perth, Adelaide, Canberra, Darwin and Hobart, the vacancy rate was below 1%. 

Brisbane’s rate remained at 1.5% in March 2021.

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. 

Over the month to 12th April 2021, capital city rents rose 1.3% for houses to $557 per week but fell 0.2% for units to $411. 

Reflecting rental accommodation oversupply, Melbourne and Sydney unit rents fell by 1.4% and 0.4%, respectively.

Over the year, Melbourne and Sydney unit rents are down substantially by 12.0% and 6.5%. 

Melbourne house rents fell by 0.5% over the month and by 6.1% over the year to 12th April.

In Sydney, house rents rose by 0.9% from a year ago.

Elsewhere, house rents rose in Adelaide, Perth and Brisbane by more than 2% over the month to 12th April, while unit rents also rose.

"Over the year, rents have shown strong growth in the smaller cities, by as high as 25.5% for houses and 11.1% for units in Darwin," Christopher advised.

Nationally, house rents rose by 14.7% while unit rents rose 6.5%, pushed up by strong growth in regional locations around Australia.

"Vacancy rates remain very tight in Australia’s cities excluding Sydney and Melbourne and this is creating a surge in rents in Perth, Adelaide and Brisbane.

“However, vacancy rates for Melbourne and Sydney remain elevated.

"The loss of international student tenants due to COVID-19 has hit both cities hard and the ongoing high rate of dwelling completions keeps these rental markets in surplus.

"That said we are seeing increasing signs that the absolute worse for CBD landlords has passed.

“The Melbourne CBD vacancy rate now stands at 8.3%, while the Sydney CBD vacancy rate was 6.2% in March 2021. 

"While they are obviously still elevated, those figures are down from the double digits last year and fell again for the month of March.

“Meanwhile vacancy rates rose in the Blue Mountains, North Coast NSW, Mornington Peninsula rose for the month.

"It may be a signal we are seeing a return of the some of the population back to the inner cities,” Christopher said.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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