City centre vacancies continue to rise

City centre vacancies continue to rise

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The level of residential property rental vacancies rose during December, with capital cities and mining towns the worst hit.

The national vacancy rate, according to SQM Research, rose 0.4 percentage points to 2.6 per cent in December, coming to a total of 73,082 vacancies nationwide.

Greater Melbourne’s 3.4 per cent vacancy rate for December marks the fifth consecutive increase for the Victorian capital, while the Melbourne CBD recorded a 5.8 per cent vacancy rate – well above the 3.0 per cent target for equilibrium.

Similarly to Melbourne, CBD vacancies surged in the second half of 2013, with Brisbane’s CBD currently sitting at 5.4 per cent and Perth’s CBD at 5.9 per cent.

SQM Research claims the elevated vacancy rates are due to new supply on the market in inner-city localities and can explain some of the surges in vacancies for these cities.

The research house also noted that seasonality has had a significant part to play in December’s result, with vacancy rates tending to rise at the very end of each calendar year.

Despite the poor result, the figures were even worse in mining ‘boom towns’, with vacancies continuing to climb.

Gladstone recorded a vacancy of 11.1 per cent, while Karratha (8.0 per cent), Mackay (6.8 per cent) and Port Hedland (6.3 per cent) fared only slightly better.

Adelaide and Hobart recorded a comparatively low vacancy rate of 1.6 per cent each, while Darwin had the next lowest rate at 1.9 per cent.

Greater Perth and Sydney tied with a rate of 2.1 per cent, while Canberra had 1,220 properties available for a vacancy rate of 2.3 per cent.

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