Spike in lockdown CBD rental vacancies as national vacancy rate falls to decade lows: SQM

Louis Christopher, managing director of SQM Research, forecasts vacancy rates will fall again in September

Spike in lockdown CBD rental vacancies as national vacancy rate falls to decade lows: SQM
Spike in lockdown CBD rental vacancies as national vacancy rate falls to decade lows: SQM

The national residential property rental vacancy rate has fallen to just 1.6% in August,  the lowest rental vacancy rate since March 2011.

SQM Research calculated the total number of vacancies Australia-wide now stands at 58,856 residential properties, down from 61,313 in July. 

But while there were new falls in rental vacancy rates across many regions, CBD rental vacancy rates have surged again over August. 

Vacancy rates rose in the Sydney CBD to 7.8%. Melbourne CBD also recorded a rise in rental vacancies to 8.3%. 

Overall Melbourne’s vacancy rate fell to 3.5% in August from 3.6% in July, while in Sydney vacancy rates dropped to 2.6% from 2.7%. 

In a sign that harsher capital city lockdowns are affecting the rental market, many regions in NSW recorded falls in rental vacancy rates such as the Blue Mountains and NSW North Coast  which recorded falls in vacancies over August to 0.6% and 0.7% respectively.  

In Adelaide, Perth, Darwin, Canberra and Hobart the vacancy rate remained below 1%, while Brisbane’s rate remained constant. 

Over the month to 12 September 2021, national asking rents rose 1.3% for houses to $533 per week and units rose by 0.2% to $402 a week. 

The national rise was driven by larger regional increases over and above the capital cities. 

SQM Research believes the lockdowns may have triggered another wave of interest in regional living as many of the community seek freedom away from harsh Covid measures. 

Capital city rents remained steady for houses over the past 30 days and are up by 9.1% over the past 12 months. 

Rents for units rose by 0.2% over the past 30 days and up by just 1.9% for the past 12 months.

Rents rose for most regions around Australia. Rents for houses in North Coast NSW rose by 4.2% for the month. Rents rose by 6.7% for the month in Sydney’s Blue Mountains. Rents also rose by 4.8% for houses in the Mornington Peninsula and rents rose a stunning 8.2% for houses in Toowoomba.

Louis Christopher said there are strong signs the current lockdowns are creating another wave on interest in regional property. 

"While it is true that a number of regional areas have been in lockdown, it has been perceived that the regional lockdowns have not been as harsh or as widespread compared to the city-wide restrictions.
"Going forward, we anticipate that vacancy rates will fall again over the month of September.

"Weekly listing updates through to the 12th of September suggest a further tightening of conditions and so it is reasonable to expect another surge in rents in most areas except for the CBD locations.”

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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