Rental vacancy rates rose in every capital city in April, according to the latest data from Domain.
Vacancies rose by 50 basis points to 3.10% in Sydney month-to-month, while Melbourne’s 1.70% vacancy rate represents a 40 point increase from March.
Perth recorded the biggest increase in vacancies moving from 2.60% to 3.20%, and Darwin the smallest at 4.3% to 4.4%.
Averaged across the eight capital cities:
- The vacancy rate is 2.24%;
- Vacancy rates have increased by 39 basis points since last month;
- Vacancy rates have increased by 16 basis points since 12 months ago.
Rental vacancy rates Australia
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This data came as a surprise to the property research site, as April is usually a tighter month with fewer rental listings than usual.
Historically, rental listings are 8% lower in April.
According to Domain research analyst Eliza Owen, April is usually a tight month, as stock dries up from the “start of year bump” markets usually experience in January.
“It’s a seasonal trend we’ve observed in the past 10 years or so,” Ms Owen said.
“It was a surprise to see that each of the capital cities had a jump in rental listings over the month.”
Ms Owen did list a couple of reasons why vacancies continued to increase in April, one of which is first home buyers.
“In finance numbers, we’ve seen more people taking out loans as first-home buyers which could mean less demand for rentals,” she said.
“And we’ve had more apartments coming onto the market as investments after the apartment boom which could mean higher vacancy rates.”
CoreLogic’s head of research Tim Lawless concurs with this – at a CEDA event this week he called first home buyers “the bright spark” in the Sydney market.
“First home buyers are probably the bright spark here, and potentially are one of the factors that could be driving the market place going forward,” Mr Lawless said.
“Better affordability, the fact that we are still seeing mortgages very low and a build up in pent-up demand for first home buyers is probably one of the factors supporting values around that lower end of the marketplace.”
Sydney’s vacancy rate has increased by 110 basis points since April 2018 – according to Domain, 6,900 new rental vacancies have popped up in this time.
“I guess what’s more surprising about the April results for cities like Brisbane, Perth and Hobart, where vacancy rates have been tightening, is that we’ve sort of got this jump in the level of rental supply,” Ms Owen said.
Ms Owen also said another factor could be the recent Easter and Anzac holidays, which disrupted a lot of agencies.
“The agencies themselves had [fewer] staff working during that period that could have meant there were fewer inspection days which extends the time a property sits on the market for rent,” she said.
“In fact, we did see a significant portion of rental listings on the market in April carrying over from the previous month.”
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