Residential rents rise as vacancies plunge ahead of Australian border re-opening

Rents are set to soar across the country this year as strong demand drives the national vacancy rate to record lows ahead of the international border opening next week.

Interstate migration saw Brisbane’s vacancy rate drop 0.2 per cent to 1.1 per cent in January. Above, new apartments in the inner suburb of Newstead.

National residential property rental vacancy rates have fallen to their lowest levels in 16 years, as competition for properties heats up ahead of the full reopening of the international borders next week.

SQM Research data reveals the national vacancy rate fell 0.3 per cent in January to 1.3 per cent, with the number of properties available to rent in capital cities falling below 50,000.

Sydney and Melbourne saw vacancy rates fall faster than every capital city in January.

Sydney dropped from 2.6 per cent to 2.1 per cent, while Melbourne declined 0.5 per cent to 2.7 per cent.

Vacancy rates fell in the Sydney CBD to 4.5 per cent and Melbourne CBD to 4 per cent, with international students and certain visa holders allowed to enter Australia from December.

Interstate migration saw Brisbane’s vacancy rate drop 0.2 per cent to 1.1 per cent, while Darwin fell below 1 per cent to 0.9 per cent.

Perth’s vacancy rate remained unchanged at 0.6 per cent, while Canberra tracked lower at 0.7 per cent.

Adelaide (0.6 per cent) and Hobart (0.3 per cent) have the lowest vacancy rates in the country in January.

Capital city rental vacancy rates.

Capital city vacancy rates have now returned to normal longer-term averages recorded prior to the Covid-19 outbreak. SQM Research forecasts further falls in CBD rental vacancy rates as the internal border reopens and a part return to “working from the office” continues.

SQM Research managing director Louis Christopher said the fall in vacancy rate over January was sharper than what had been forecast.

“All this represents an acute shortage of rental properties. And the shortage has already been translating into large surges in weekly rents across the country,” he said.

“It is now very likely market rents will rise by over ten per cent this year. Indeed, it could actually be much more than this as we are recording a rise in capital city combined rents of 5.2 per cent just in the last 90 days.”

Unit rents in Sydney are now 7.2 per cent more expensive than at the same time last year, while Brisbane apartments are up 2.7 per cent.

Canberra has seen the largest jump in house rents, up 11.3 per cent, followed by Hobart (10.1 per cent) and Darwin (9.7 per cent).

Capital city house rents are up 12.7 per cent and 7 per cent for apartments.

Originally published as Residential rents rise as vacancies plunge ahead of Australian border re-opening