Landlords market': Rental vacancy rates plunge to decade low

author-avatar By on March 18, 2021
Landlords market': Rental vacancy rates plunge to decade low

Tenants in most capital cities will be hard pressed to find a new home with the number of empty properties plummeting and rents rising.

For those trying to find a rental at the moment, may the odds be ever in your favour. 

Vacancy rates data from PRD Research shows rental vacancy rates in many capital cities have broken their five and ten-year records. 

Brisbane has broken its own vacancy rate record, with the current vacancy rate of 1.5% being lower than it was 10 years ago (1.7% in February 2011).


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 19, 2021. View disclaimer.

"This is quite an achievement, especially compared to Sydney and Melbourne," said PRD Chief Economist Dr Diaswati Mardiasmo. 

"The rental market has seen some difficulties of late due to the increase in weekly rental prices and absence of supply," Dr Mardiasmo said.

"Current vacancy rates data further illustrates how tight and competitive our rental market is at present, with many rental properties receiving higher numbers of applications than anticipated."

With the exception of Melbourne and Sydney where the vacancy rate stands at 4.5% and 3.3% respectively, the rental market has become extremely tough across the rest of the country.

Hobart, Adelaide, Perth, Canberra and Darwin all recorded extremely low vacancy rates under 1.0% in February 2021, and have all broken their five and ten-year records.

Screen Shot 2021-03-18 at 10.24.17 am

Source: PRD

One real estate agent told Savings.com.au they received nearly 1,000 applications for 12 properties they recently advertised.

On the tenants' side, Brisbane resident Sam Gaffer has been trying to find a new rental property since February, but says he hasn't had any luck.

“We apply for five places a day, upload everything they need in 1Form, offer above market value for rent and all we get back is a text declining our application," he told Savings.com.au.

“Last week, after visiting one (a property manager), I pulled over and cried. I can’t believe how hard it is to get a house.”

While it's a bleak time for those trying to find a new home, the tight rental market is a prime opportunity for investors.

"A low, and/or declining vacancy rate benefits investors, as it indicates higher occupancy rates and quicker cash flow," Dr Mardiasmo said.

"Current rental market conditions have benefitted investors, signalling the need for other investors to enter the market immediately.

"More than ever, now is the time for investors to enter the market."

Tenants in some cities are paying up to 25% more in rent

In more bad news for renters, rent prices in many parts of the country are on the rise.

Houses in Darwin are costing tenants 25% or $146 more than compared to a year ago. Unit rents jumped by 7.1% or $31.

In Perth, house rents have soared by 12.8% ($65) more than this time last year, while unit rents increased by 10.2%

When including regional Australia, national rents rose 11.1% for houses and 7.4% for units over the same period.

But in Melbourne and Sydney, it's a completely different story.

Asking rents for apartments in Melbourne plummeted by 12.2% over the year to 12 March 2021, reflecting the oversupply of properties particularly in the CBD where the vacancy rate is 7.5%.

Meanwhile, house asking rents fell by 6.7%.

Sydney's asking rents also fell year-on-year, by 9.0% for units and 6.7% for houses. 

"The figures for Melbourne and Sydney would be disappointing for existing property investors," said SQM Managing Director Louis Christopher.

"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."


Stewart Munro on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Latest Articles

author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy