Number of vacant properties rises 40% in Sydney

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on February 14, 2019
Number of vacant properties rises 40% in Sydney

Photo by Christopher Burns from Unsplash.

Property investors in Sydney may face tough times ahead as the number of vacant properties jumped 40% over the past 12 months, according to SQM Research.

In January 2018 there were 15,775 vacant properties in Australia’s most populated city – this number rose to 22,426 in January 2019, which is a 40% increase.

The vacancy rate of Sydney property for January 2019 was 3.2%, up from 2.3% at the same time last year.

In addition to rising vacancy rates, Sydney investors are also feeling the pinch in their rental returns.

House price rents have fallen 1.8% over 12 months, while unit prices fell by 2.8% over the same period according to Domain’s House Price Report for December 2018.

Louis Christopher, managing director of SQM Research, said he expects vacancy rates to rise in Sydney.

“Given that we are just reaching the peak in dwelling completions right now, we expect vacancy rates to rise in Sydney, potentially up to 4 per cent for this year,” Mr Christopher said.

Sydney not the highest vacancy rate

Sydney is not the city with the highest percentage of vacant properties – that honour belongs to Darwin, which boasts a vacancy rate of 3.8%.

The rate for January 2018 was 3.1%, while the actual number of vacancies increased by a mere 18, so the Sydney figure is a bit more statistically significant.

The city with the lowest vacancy rate is Hobart at just 0.5%, while Perth registered the biggest drop from 4.4% to 3.0%.

City Jan-2018 VacanciesJan-2018 Vacancy RateJan-2019 VacanciesJan-2019 Vacancy Rate
Adelaide 2,793  1.5% 2,141  1.1%
Perth 8,909  4.4% 6,121  3.0%
Melbourne 9,744  1.8% 10,564  1.9%
Brisbane 11,505  3.6% 8,911  2.7%
Canberra 569  0.9% 594  0.9%
Sydney 15,775  2.3% 22,426  3.2%
Darwin 941  3.1% 1,193  3.8%
Hobart 126  0.4% 144  0.5%
National 74,113  2.3% 72,574  2.2%

Source: SQM Research

“It still appears to be a tenants market in Darwin and Sydney where vacancy rates are high at 3.8% and 3.2% respectively,” Mr Christopher said.

“Going forward, we expect another seasonal decline in vacancies for the month of February.

“However for the year our expectation is national vacancy rates will rise at the national level, driven by rises in Sydney.”

SQM’s methodology is based on online rental listings that have been advertised for three weeks or more that are compared to the total number of established rental properties.

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William Jolly joined as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.


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