Melbourne’s Rental Market Strengthens As Vacancies Tighten and Asking Rents Rise
By Louis Christopher on 24 Apr 2014
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Figures released by SQM Research have revealed that the number of residential vacancies nationally have decreased further during March.
They dipped 0.1 percentage points to record a 2.0 per cent vacancy rate nationally, and 57,964 vacancies.
Year on year, vacancies are also down 0.1 per cent, bucking the trend for the first time in several months where we have seen considerably looser vacancies when compared to the corresponding period of the previous year.
Of considerable interest is that Melbourne’s vacancy rate continues to tumble, now currently recorded at 2.1 per cent – a figure it has not reached since September 2010.
“The national rental market remains largely stable, even while we have recorded falls in vacancy rates for March…”
The capital city recorded both the largest monthly decline (0.3 percentage points) and the largest yearly decline (0.5 percentage points).
In addition to this, as you can see from the table below, Melbourne’s asking rents have been up on a monthly, quarterly, yearly and 3 year basis, signalling that landlords have been comfortably able to lift their rental asking prices in this capital city.
We can see from this that the city of Melbourne’s rental market is starting to reveal signs of strengthening, after a long period of elevated vacancy rates in comparison to other capital cities.
However, we do note that the Melbourne CBD continues to record high vacancy rates (postcodes 3000= 4.7 per cent, 3006= 4.9 per cent and 3008= 4.5 per cent).
The national rental market remains largely stable, even while we have recorded falls in vacancy rates for March, which is normal for this time of year.
The results out of Melbourne are the exception however, with a tightening rental market becoming apparent.
Our warning on certain capital city CBDs remains and indeed with the large surge in dwelling approvals, we strongly believe CBD vacancy rates are set to climb from already elevated levels as we head into 2015 and 2016.
