Data released by SQM Research shows the vacancy rate in Melbourne has dropped to just 1.7 per cent, a near 10-year low.
The data also shows other eastern capitals experiencing decreased vacancy rates, while the national rate maintained steady.
In Canberra, the vacancy rate fell to just 0.9 per cent, the lowest since May 2012, while in Sydney, it fell to just 1.9 per cent, down from 2.5 per cent in December.
Nationwide, the vacancy rate was 2.4 per cent, with 78,029 rental homes available in February.
“The last time the vacancy rate was 1.7 per cent in Melbourne was in June 2007, almost 10 years ago, so this is quite remarkable. Despite predictions of looming apartment oversupply in inner-city Melbourne, we are seeking vacancies fall, rather than rise,” managing director of SQM Research, Louis Christopher, said.
“Even in the Docklands, the vacancy rate tumbled to just 2.4 per cent last month, down from a high of 6 per cent in December. The rental market could tighten further in Melbourne as some apartment developments are scaled back, which would cut supply and could pressure rental growth higher in that city,” Mr Christopher said.
Perth recorded the highest vacancy rate at 4.8 per cent, up marginally from 4.7 per cent in January, followed by Darwin at 3.8 per cent, up from 3.7 per cent in January. In Brisbane, the vacancy rate was steady at 3.3 per cent, and in Adelaide it was 2.0 per cent. Hobart’s vacancy rate was the lowest of all capital cities at just 0.7 per cent.
The lower vacancy rates were reflected in asking rents, Melbourne saw a rise of 1.6 per cent over March, resulting in an annual change of 7.2 per cent.
Prices continued to fall in Darwin where there was a 1.5 per cent reduction in the asking rents for houses and 1.3 per cent in apartments. The biggest declines for the year were in Perth where unit rents fell by 10.1 per cent and house rents fell by 7.1 per cent.
Brisbane unit asking rents were down by 0.5 per cent over the month and house asking rents were down by 0.4 per cent.
“Unlike Melbourne or Sydney, Brisbane’s unit rental market is slightly oversupplied, which has kept down rental growth,” Mr Christopher said.
“But in the other big cities, rental growth is strong, and well above the inflation rate and wages growth, suggesting rentals are getting more and more unaffordable for the average person.”