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

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

Current knowledge from PropTrack has discovered a big 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 signify geographical areas with a minimal inhabitants of 100,000 folks, Flaherty mentioned. A wholesome emptiness fee often hovers round 3%, hanging a stability between out there leases and tenant demand. Nonetheless, in January, solely 2% of SA4 areas had been capable of 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 carefully had 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, in response to 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 under 1%, at 0.78% and 0.86% respectively.

Regional Queensland recorded the bottom emptiness fee outdoors of capital cities at 0.95%, carefully 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 properties relative to tenant demand,” Flaherty mentioned in her evaluation.

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

“It will preserve aggressive circumstances in each the markets to lease and in addition to purchase,” she mentioned. “Consequently, rental availability is more likely to deteriorate additional over the 12 months which is able to erode affordability. We’re additionally more likely to see the common family dimension enhance as extra look to transfer into share homes or keep longer within the household dwelling.”