Rental vacancies continue to decline

Rental vacancies continue to decline

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The level of residential property rental vacancies dipped during October, according to the latest data.

SQM Research reveals the vacancy rate is now at two per cent, with a total of 57,471 vacancies across the country.

The October figures are the fourth straight month decline on a national level, with Sydney, Adelaide, Perth, Canberra and Hobart all recording a monthly decrease in vacancy rates.

SQM Research said it expected vacancies to begin to rise in the lead up to Christmas, as this normally occurred during this time of year.

On a year-on-year comparison, vacancies in some cities of Australia are much higher than this time in 2012, particularly in Perth, Brisbane and Canberra.

Sydney has remained steady despite a swift increase in sales activity in this capital city, which indicates the recovery being experienced has been predominantly motivated by investors, rather than first home buyers at this stage. 

The city of Hobart has recorded lower vacancies than 12 months ago and is now getting to the point where there will be upward sustained pressure on rents as the market turns back in favour of landlords.

Louis Christopher, managing director of SQM Research said: “Nationally, it is the fourth straight month where rental vacancies have tightened, though I note this same trend happened this time last year. Sydney is an interesting case. We know the sales market is very active and normally, in most recoveries, vacancies rise as renters turn themselves into first home buyers. However, Sydney is now recording a very tight vacancy rate of 1.5 per cent.

"It’s evidence the first home buyers are indeed remaining renters for longer. If Sydney vacancies remain this low, that will put renewed upward pressure on rents again for next year.”

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