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The number of available Australian rental properties is half the volume reported prior to the pandemic, according to new PropTrack research.
Australia’s national vacancy rate for February was 1.47 per cent, down by 0.1 per cent from January’s results and 52 per cent lower than what was reported in March 2020.
According to PropTrack, there has not been such a low stock of rentals since late 2018, a reflection of surging demand from renters having outstripped supply and investors leaving the market.
In the nation’s capital cities, where the February vacancy rate was 1.43 per cent, there are currently 55 per cent fewer rentals available when compared to March 2020. Meanwhile, Australia’s regional hubs have experienced a 41 per cent drop in rental stock during that time, culminating in a 1.58 per cent vacancy rate last month.
Perth (0.92 per cent) and Adelaide (0.85 per cent) remain the hardest markets to locate a rental property in Australia, with the Western Australian capital logging the largest decline in available rentals since the dawn of the pandemic (70 per cent). On the contrary, the ACT remains the only market across the country to report an increase in the number of rental availability (74 per cent).
The research body forecast the year ahead will be dominated by a sustained lack of available supply, extrapolated by strong demand influenced by increased migration and the return of international students, continuing to drive median weekly rents — which rose 10.2 per cent last calendar year — increasingly higher.
Australia’s two largest cities, Sydney and Melbourne, have reported nation-leading vacancy rate declines in the past 12 months of 1.04 per cent and 1.76 per cent, respectively, leading to 1.70 per cent of rental properties available to tenants in the harbour city and 1.41 per cent for the Victorian capital.
PropTrack indicated that the considerable tightening of these rental markets follows a resurgence of inner-city demand in Australia’s most populous cities. Data from the Real Estate Institute of NSW (REINSW) found that inner-ring Sydney experienced a sharp drop in vacancy rates from 2.5 per cent in December to 1.7 per cent in January.
Just three markets across the country possess a vacancy rate exceeding 2 per cent; Darwin (2.53 per cent), the ACT (2.09 per cent), and the regional Northern Territory (2.80 per cent). That means an overwhelming majority of Australian rental markets find themselves in extremely tight conditions.
Given the increasingly strenuous market conditions, PropTrack expects the financial pressures facing many renters in light of increased weekly rents and cost-of-living pressures will be exacerbated throughout the rest of the year.
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