Some principals in Melbourne may see their property management income slide in the coming year as the city’s rental vacancy rate jumped to 4.4 per cent in December – almost double that of the next highest capital city figure, new data has revealed.
“Melbourne is looking ominous and we are expecting rental declines for this capital city for 2012,” said Louis Christopher, managing director of SQM Research.
“Melbourne has definitely become a renter’s market and landlords can no longer be expected to extract higher rents in Melbourne.”
Figures released by property research house SQM Research reveal that national residential vacancies rose significantly during the month of December, increasing from 1.9 per cent to 2.4 per cent and coming to a total of 61,490 vacancies.
While part of the rise was attributed to a seasonal increase, SQM noted the December rise was steeper than in previous years. At this stage, however, SQM said it was “wary of pointing to any other possible explanation for the sudden increase besides the seasonal effect.”
“What is of particular concern is Melbourne’s seemingly ever increasing vacancy rate which has been recorded at a high 4.4 per cent for the month of December, a figure that most definitely reflects an oversupply issue for the capital city,” the company said.
“Over the course of 2011, a steady increase in vacancy rates has been recorded for Melbourne, peaking in December with 16,007 vacancies – an amount that goes beyond merely seasonal factors.”
While on-month increases were reported in every capital city nationally, vacancy rates remain historically low.
“It is still a landlord’s market and we are expecting rental increases overall to be within the four to six per cent range and in some regions within Sydney - even higher, throughout the course of the year,” Mr Christopher said.
Perth now has the tightest vacancy rate of the capital cities, undercutting Canberra by 0.1 per cent (now at 1.1 per cent), coming to a total of 1,565 vacancies and recording a vacancy rate of one per cent.
Hobart booked the largest yearly growth, increasing by 1.1 per cent since the corresponding period of the previous year (December 2010) and coming to a total of 559 vacancies (2.4 per cent).
Darwin has recorded the most substantial yearly falls, decreasing by 1.2 per cent since the corresponding period of the previous year (December 2010) and coming to a total of 405 vacancies (1.7 per cent).
In the other capitals, Brisbane’s vacancy rate rose by 0.5 per cent from November to 2.5 per cent in December; Adelaide’s vacancy rate increased 0.3 per cent to reach 1.9 per cent; and Sydney’s vacancy rate touched 2.0 per cent, up from 1.5 per cent in November.
SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties.