Increase in vacancies expected later in the year
Australia’s rental market tightened further in February, with the national vacancy rate dropping to a record low of 0.7%, underlining the persistent gap between limited housing supply and increasing demand.
Domain’s new research has highlighted the imbalance exacerbated by robust population growth, primarily through overseas migration, challenges within the construction sector, and escalating property prices, which have prolonged the duration for which people rent.
Despite a decrease in the national average of views per rental listing in February, both on a monthly and annual basis, the data indicates a reduction in competition among renters. This trend, coupled with historically low vacancy rates, points to a slowdown in rental market growth, potentially foreshadowing an increase in vacancies later in the year.
Capital cities across Australia have mostly seen a decrease in vacancy rates in February, although some capitals report higher rates compared to the previous year.
Sydney and Melbourne both recorded a vacancy rate of 0.8%, a new low, driven by a dwindling supply of rental properties. Despite this, both cities experienced a drop in the average number of views per rental listing, indicating a slowdown in demand.
Brisbane’s vacancy rate declined to 0.7%, nearly reaching its all-time low, with the smallest number of vacant rentals seen in 10 months. Similarly, Perth matched its record low vacancy rate at 0.3%, making it, along with Adelaide, the most competitive city for renters. Adelaide's vacancy rate held steady at 0.3%, close to its historical low, highlighting a critical need for increased rental stock.
Darwin and Canberra, with vacancy rates at 1.3%, have the highest rates among the capitals, despite Darwin experiencing a consecutive monthly decline. Hobart’s rate remains steady at 0.7%, marking the lowest since February 2023, moving away from its record high in June 2023. Canberra saw the largest monthly change, dropping to its lowest since November 2022, yet remains less competitive for tenants compared to other capitals.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
