Tight conditions persisted throughout 2023
In a modest reprieve for renters, national vacancy rates experienced a marginal uptick in December, rising by 0.05 percentage points to 1.12%, fresh PropTrack data showed.
This development follows a year-long trend indicating a cumulative decline of 0.13 percentage points, underscoring the persistent tight conditions in the rental market throughout 2023.
Rental vacancy rates across city, regional markets
Among capital cities, Sydney witnessed the second-largest increase in December, climbing by 0.09 percentage points to 1.37%, though it had experienced a reduction in vacancies over the year.
Melbourne’s rental vacancy rate, meanwhile, remained largely unchanged in December, with a marginal rise of 0.01 percentage points to 1.18%. However, Melbourne saw the most significant tightening in conditions throughout 2023, with a decrease of 0.33 percentage points.
Brisbane’s rental market maintained its extremely tight status, with vacancies persisting below 1%. In December, there was a minor increase of 0.02 percentage points, sustaining pressure on the local rental landscape.
Adelaide and Perth retained their positions as the tightest rental markets in the country, with vacancy rates consistently below 0.75%. Conditions in both cities eased slightly in 2023, with vacancies increasing by 0.02 and 0.06 percentage points, respectively.
In regional areas, renters experienced a modest relief in December, with vacancy rates easing by 0.06 percentage points. However, the overall trend throughout the year showed a decrease of 0.07 percentage points in regional rental availability.
Commentary from PropTrack
“Although vacancy rates eased in most markets in December, rental markets remain tight, and stock is extremely limited,” said Eleanor Creagh (pictured above), PropTrack senior economist. “Low rental vacancy rates are indicative of tight rental markets, with tenants competing for limited stock.
“These conditions made it difficult for many to find an available rental property and drove strong price growth throughout 2023. Many tenants are likely to be spending an increasing portion of their income on rent, placing pressure on household budgets.”
While acknowledging the persistently low number of vacant properties, Creagh suggested that conditions in the rental market are unlikely to deteriorate at the same pace seen in 2022 and 2023. This cautious optimism implied that rental prices could stabilise and experience a slower rate of increase compared to the previous year.
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