Obvious Rental Market Slowdown As Vacancies Continue To Surge
By Louis Christopher on 24 Jul 2014
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Hobart is the only capital city where vacancy rates went down in June
Photo: Rob Taylor
Figures released by SQM Research have revealed that the number of residential vacancies increased during June.
A 2.3 per cent vacancy rate was recorded nationally, comprising 69,258 vacancies.
This result reflects a genuine upward trend in vacancies around the country, and the highest result since the December 2013 seasonal spike.
How Capital City Vacancy Rates Stack Up
Hobart is the only capital city to record a monthly vacancy rate decrease. The remainder recorded either steady figures or rises during June.
Melbourne has edged it way back up toward the 3 per cent mark, revealing a vacancy rate of 2.7 per cent, while Perth wasn’t far behind at 2.5 per cent.
“At this stage the market is increasingly favouring tenants across the country.”
Interestingly, Perth’s vacancy rate has loosened considerably since the corresponding period of the previous year (June 2013), where vacancies were recorded at 1.6 per cent.
Darwin has similarly climbed in rental vacancies, surging from 0.8 per cent in June 2013 to 1.6 per cent in June 2014.
Hobart has headed in the polar opposite direction, falling from a vacancy rate of 2.6 per cent in June 2013 to 1.6 percent in June 2014.
What Does It All Mean?
As gradual increases have continued over recent months, SQM Research is strongly of the opinion that the nation’s rental market is slowing down.
Further to this, SQM Research’s Asking Rent’s Index has revealed a monthly stagnation in the capital city average’s asking rent. No change has been recorded month-on-month for houses, and a 0.7 per cent decrease in asking rents for units.
“The nation’s rental market is slowing down.”
At this stage the market is increasingly favouring tenants across the country. While this is not yet a route for landlords, it certainly is at a stage where rents will unlikely rise above inflation for the next 12 months.
This means that rental yields will continue to fall, thereby reducing the net cash flows for new property investors in the marketplace.
