Rental Vacancy Rates
According to Domain's monthly rental vacancy update, the numbers remain mixed around Australia's capital cities. To calculate the vacancy rate for each city, Domain takes into account the proportion of available, vacant rental properties compared to each city's total rental market.
- Decreasing slightly in each capital city from the vacancy rates reported in December 2018, the highest vacancy rates were reported in Sydney, Darwin and Perth.
The vacancy rates for Australia's capital cities in January 2019 were:
• Sydney - 2.8%
• Melbourne - 1.8%
• Brisbane - 2.6%
• Perth - 2.9%
• Adelaide - 1.1%
• Hobart - 0.4%
• Canberra - 1.0%
• Darwin 4.7%
• Newcastle 2.5%
Up from 1.7% in January 2018, Sydney's January 2019 vacancy rate of 2.8% indicates that more properties were available for tenants in January 2019 compared to the previous year. In January 2019, there were 17,500 rental vacancies across Sydney compared to 11,000 in January 2018.
In Melbourne, the vacancy rate also increased from 1.4% in January 2018 to 1.8% in January 2019. This equated to 2,000 extra rental listings available across Melbourne in 2019.
Hobart remains the tightest rental market in Australia with a vacancy rate of just 0.4% in January 2019, remaining unchanged from the previous year. This equates to just 100 rental vacancies across the city of Hobart in January 2019. With an increase in tourism across Tasmania driving the use of Airbnb and low new housing starts across the state, this has seen rental prices increase by 6.5% in 2018 to $420 for houses. Apartments increased further with an 11.8% increase to an average price of $380 per week.
Further north in the nation's capital, the vacancy rate in Canberra is 1.0%. With this low vacancy rate, average rental prices in Canberra are amongst the highest in comparison to Australia's other capital cities. Houses average $560 per week, while apartments average $465 per week in Canberra.
The rental market is looking promising in Perth, Brisbane and Adelaide. All experiencing declines in vacancy rates, this is usually the pre-cursor to increasing rental prices in a city, if the low vacancy rates continue. In Brisbane, the vacancy rate fell 0.5% to 2.6% in January 2019. Perth also experienced a decrease in vacancy rates down to 2.9%, while Adelaide had a small decrease of 0.1% down to 1.1% in January 2019.
While the higher vacancy rates in some capital cities could be cause for concern, it's important to remember that it's only one month of data and that an influx of new dwelling vacancies across cities can distort this data. It is, however, a timely reminder to keep vacancy rates and the market in mind when it comes time to renewing leases and advertising your investment properties for rent.