Australia’s rental market tightens as emptiness charges hit file low

Australia is at the moment grappling with a rental disaster, which consultants warn might worsen within the coming months.

Latest information from PropTrack has discovered a major decline within the availability of rental properties nationwide, with the share of vacant leases declining over the previous three years. From January 2021 to January 2024, the emptiness fee dropped from 2.42% to 1.09%.

SA4s characterize geographical areas with a minimal inhabitants of 100,000 folks, Flaherty stated. A wholesome emptiness fee normally hovers round 3%, hanging a steadiness between accessible leases and tenant demand. Nevertheless, in January, solely 2% of SA4 areas have been in a position to preserve emptiness charges above this threshold.

The Bunbury area in Western Australia recorded the bottom emptiness fee nationwide in January, with solely 0.45% of rental properties vacant. This marked the seventh consecutive month that Bunbury boasted Australia’s lowest emptiness fee. Following intently have been Queensland’s Sunshine Coast and Melbourne Outer East, with emptiness charges of 0.58% and 0.6% respectively.

Whereas low emptiness charges persist in each capital cities and regional areas, cities have skilled essentially the most important decline in availability over the previous 12 months, based on Flaherty.

Higher Perth emerged because the hardest rental market, with a emptiness fee of simply 0.76% in January. Equally, Higher Adelaide and Higher Brisbane reported emptiness charges beneath 1%, at 0.78% and 0.86% respectively.

Regional Queensland recorded the bottom emptiness fee outdoors of capital cities at 0.95%, intently trailed by regional Tasmania at 0.97%.

“The rising prevalence of sub-1% emptiness charges throughout Australia’s capital metropolis and regional areas is extraordinarily regarding and factors to a extreme undersupply of houses relative to tenant demand,” Flaherty stated in her evaluation.

In accordance with Flaherty, there could also be “little aid” within the close to future because the tempo of recent housing improvement in Australia slows to its lowest degree in a decade and inhabitants progress stays robust.

“This may preserve aggressive situations in each the markets to hire and in addition to purchase,” she stated. “Consequently, rental availability is prone to deteriorate additional over the 12 months which is able to erode affordability. We’re additionally prone to see the typical family dimension enhance as extra look to transfer into share homes or keep longer within the household house.”