Invest
Melbourne, Sydney continue struggle towards rental market recovery
While the national residential rental vacancy rate has remained steady, Melbourne and Sydney are still struggling through the pandemic’s effects.
Melbourne, Sydney continue struggle towards rental market recovery
While the national residential rental vacancy rate has remained steady, Melbourne and Sydney are still struggling through the pandemic’s effects.
SQM Research has found the national residential rental vacancy rate sitting at 2.0 per cent in February 2021 – a result that stands steady from a year ago. Currently, there are a total of 71,544 vacant rental properties across combined capital cities.
Drilling down to each capital city, Melbourne and Sydney garnered results that “would be disappointing for existing property investors”, according to SQM Research managing director Louis Christopher.
Melbourne saw the highest vacancy rate over the month at 4.5 per cent or a total of 27,804 vacant rental properties. While this is lower than the December 2020 peak at 4.7 per cent, the current rate stood way higher than last year’s 1.9 per cent.
In the Melbourne CBD, vacancy rate is even higher at 7.5 per cent, albeit down from October 2020’s 9.4 per cent.
Mr Christoper said that Melbourne remains weighed down by the withdrawal of international students as well as the consistently underwhelming demand for rental accommodation since COVID-19 hit.
Meanwhile, in Sydney, vacancy rates over February 2021 sits at 3.3 per cent or 24,820 vacant rental properties, higher than last year’s 2.9 per cent.
In the Sydney CBD, the vacancy rate has dropped to 6.3 per cent, far lower than the May 2020 peak at 14.8 per cent.
“Normally, vacancy rates in these two cities fall over February, in part due to international students starting their semesters, but given the ongoing closure of the international border, the seasonal increase in rental demand has not occurred this year.
“This year will favour tenants in the inner cities but will also very much remain a landlord’s market in regional Australia,” Mr Christopher commented.
In other capital cities, vacancies remain tight, with Hobart sitting at only 0.6 per cent or 194 vacant rental properties. This was followed by Darwin and Adelaide with 0.7 per cent, Canberra with 0.8 per cent, Perth with 0.9 per cent and Brisbane with 1.5 per cent.
According to the managing director, tenants continue to show strong interest in larger properties across outer suburban locations and regional areas.
Asking rents
Over the month to 12 March 2021, national average asking rents rose 0.6 per cent to $500 for houses and 1.6 per cent to $392 for units. This equates to an annual change of 11.1 per cent for houses and 7.4 per cent for units.
However, capital city average continues to see declines, with average house rents declining by -0.4 per cent to $550 and average unit rents declining by -0.2 per cent to $412. Over the year, these equal declines of -2.1 per cent and -6.6 per cent for houses and units, respectively.
Further reflecting oversupply in their rental markets, Melbourne and Sydney’s unit asking rents declined over the month by -1.4 per cent and -0.4 per cent, respectively. This equates to a -12.2 per cent annual decline for Melbourne and -9.0 per cent annual decline for Sydney.
Meanwhile, house asking rents in Sydney also declined over the month by -1.2 per cent while Melbourne’s house rents rose by 0.1 per cent. Over the year, Sydney and Melbourne’s house asking rents declined by -6.7 per cent.
But even despite the city’s struggles, as of March 2021, Sydney remains the most expensive rental market for houses, with the average asking rents at $654.90.
Canberra is currently the most expensive for unit rentals, with the average asking rent at $494.3.
On the other hand, the most affordable rental market for both houses and units is Adelaide, with the average asking rents at $427.90 and $324.10, respectively.
Elsewhere, Canberra emerged as a winner, with a 25 per cent annual increase in house asking rents.
Perth, meanwhile, saw a 12.8 per cent increase in house asking rents and a 10.2 per cent increase in unit asking rents over the year.
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
