Landlord Expectations Remain Sluggish
By Louis Christopher on 21 Aug 2014
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The balance of power is shifting from landlords to tenants
Photo: The Homepage
The number of national residential vacancies decreased very slightly during July.
A stable national vacancy rate of 2.3 per cent was recorded, which consists of 67,190 vacancies.
This result is indicative of a longer term higher vacancy rate trend across the country, despite a minor dip in listings.
Higher vacancies allude to an increase of supply in the rental market, shifting the balance of power from landlords to tenants.
Capital City Vacancy Rates
Each capital city continues to tell its own unique story. Perth and Darwin’s vacancies have soared since August in 2013, while Hobart’s dropped substantially over the same period.
“We are expecting a soft rental market for quite some time – certainly well into 2015.”
Sydney has remained steady, revealing no yearly change. Similarly, Melbourne has a 2.6 per cent vacancy rate, which is identical to what it was in July 2013.
Landlord Expectations Have Stagnated
These steady figures are in line with landlord sentiment over the past year.
Our Asking Rents Index reveals that rental asking prices have only lifted by 0.7 per cent for houses on a national level and 0.6 per cent for units on a national level since the same week in 2013.
“This result is indicative of a longer term higher vacancy rate trend across the country…”
This suggests that landlords’ expectations have stagnated on a national level.
Darwin and Sydney were the only two capital cities to record substantial increases in asking rents since this time last year, and Perth and Canberra have both recorded considerable decreases during the same period.
The Overall Rental Market
The rental market overall remains sluggish. Asking rents have only increased by 1.2 per cent to 1.7 per cent at the average capital city level. Perth rents have dragged down the total result. It’s quite clear rents in Western Australia are falling quickly.
Given our view that vacancy rates are likely to rise from these levels, we are expecting a soft rental market for quite some time – certainly well into 2015.
