Perth Vacancy Rates Continue to Climb

Photo Source: www.city-sightseeing.com

Figures released by SQM Research this week have revealed the number of residential vacancies remained tight across the nation in June 2015, with a vacancy rate of 2.4% posted based on 72,849 vacancies, up from May when vacancies were 71,970. Rates remained the same in most capital cities, excluding Perth, Brisbane and Canberra, were vacancy rates climbed.

The biggest rise was recorded in Perth and Canberra with a monthly change of 0.3 percentage points for Canberra and 0.2 for Perth. Over the year, vacancy rates in Perth have continued to climb with a significant 1.1% jump from this time last year.

Source: www.sqmresearch.com.au

Year-on-year, vacancy rates are down for Canberra, Melbourne, Hobart, and to a lesser extent Sydney. Melbourne has posted the biggest yearly fall in its vacancy rate from 2.7% to 2.3%, reflecting the tightening of the market post downturn. Hobart has also recorded ongoing yearly falls with vacancy rates dropping from 1.8% to 1.5% in June 2015.

Asking rents

Notably, Darwin has recorded a fall in asking rents of 16.4% for houses and 9.8% for units over the past 12 months, according to SQM Research. Yearly falls have also been recorded in Perth, with asking rents down 6.2% for houses and 4.9% for units. In contrast, Melbourne has recorded a rise of 3.1% for houses and 2.2% for units. Asking rents in Sydney and Adelaide have also recorded modest rises for the same period.

Overall vacancy rates were steady over the month of June. The level of vacancy rates (at 2.4%) is marginally favouring tenants. Further evidence of this opinion is that SQM asking rents index effectively remained flat for the month. We note the very large rent declines recorded in Darwin. With rents falling by 16% over the past 12 months, it is clear market conditions for existing Darwin property investors have deteriorated further. The Darwin housing market is having a severe downturn and I believe it is likely to get worse from here before the market finds a bottom.

Source: www.sqmresearch.com.au

Key Points

• Nationally, vacancies rose during June 2015, recording a vacancy rate of 2.4%, based on 72,849 vacancies nationally.
• During June, vacancy rates climbed the most in Canberra up 0.3 percentage points from May 2015.
• Vacancy rates in Hobart, Darwin, Sydney, Melbourne and Adelaide remained the same from May 2015 to June 2015.
• Perth recorded the highest vacancy rate of the capital cities at 3.6% in June 2015 based on a total of 7,184 vacancies.
• Darwin recorded the highest yearly increases in vacancies, climbing by 1.9 percentage points from a year earlier.
• Vacancy rates in Sydney remained tight in June 2015, and are up a modest 0.1 percentage points from this time last year.