Melbourne’s rental vacancy rates fell in March to 1.5 per cent while Sydney’s fell to 1.7 per cent, SQM Research data shows.
These were lower than February rates when Melbourne and Sydney were at 1.7 and 1.9 per cent respectively, but while Melbourne’s vacancy rate has been on a downward trend, Sydney’s rate has always been low, with seasonal oscillations across time, SQM managing director Louis Christopher said.
The main driver of the falls in vacancy in March was a seasonal change as residents return to the cities following the summer break.
“Vacancies usually drop in the early months of the year as people return to their jobs after the summer break and students go back to universities in March,” he said.
“Significantly, the vacancy rate continued to fall in Melbourne, despite predictions of apartment oversupply. Even in the spots where we would have expected to see oversupply, such as Docklands and Southbank, we are not seeing it, where there are thousands of apartments, new and old.”
“In Sydney too, despite high levels of inner-city apartment construction, the vacancy rate is just 1.7 per cent across the city and 0.3 per cent in the CBD. We may, however, see a bounce in April across cities as demand for rental properties drops back.”
Sydney and Melbourne’s March vacancy rates were also lower than the same time last year, dispelling concerns of a major oversupply of housing in these two cities, although there were now confirmed oversupply of dwellings in Brisbane, Perth and Darwin, Mr Christopher said.
Other cities also had the similar results. Canberra posted an even tighter rate at 0.8 per cent, down from 0.9 per cent while while Adelaide fell to just 1.8 per cent, down from 2.0 per cent in February.
Overall, the national vacancy rate fell to 2.3 per cent in March, down from 2.4 per cent.
The Real Estate Institute of NSW also provided the same data for Sydney, saying middle Sydney suffered the lowest vacancy.
“Middle Sydney led the fall in rental accommodation on offer with a 0.4 per cent decline at 1.4 per cent,” REINSW president John Cunningham said. “Outer Sydney fell 0.1 per cent at 2.1 per cent and Inner Sydney was down 0.1 per cent at 1.6 per cent.” Across regional areas, the Northern Rivers has the lowest vacancy rate at 1 per cent, down 0.1 per cent.
Reflecting the low vacancy rate, asking rents for apartments jumped 1.6 per cent and 0.7 per cent for houses in Melbourne over the month to April 12, SQM said.
Asking rents for apartments in Sydney also leapt 1.7 per cent over the month. Canberra apartment rents rose 1.5 per cent.
But, house asking rents fell in those two cities.
Darwin and Perth asking rents continue to fall in the opposite direction as vacancy in the two cities remain the highest at 3.5 per cent and 4.7 per cent respectively in March.
Overall, the continued rise in house prices has resulted in a generation of renters emerging in the major cities such as Sydney and Melbourne, and forcing down vacancy rates.