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The latest vacancy figures warn Aussies should brace for a competitive start to 2024, when a bulk of leases expire.
January and February are typically the busiest months for rentals, with the beginning of the year a time when many Australians typically execute big moves, while the looming start of term brings students searching for accommodation.
According to data from Domain, these months – known as the rental changeover period – are likely to be some of the most competitive on record in 2024, as historically low rental stock leaves too few homes for the number of prospective tenants.
The firm has reported that though there is some slight easing in the major markets of Sydney, Melbourne and Brisbane, vacancy rates are at an all-time low for the third consecutive month.
The national vacancy rate currently sits at 0.8 per cent for November 2023. And while the number of views per listing decreased over the course of the month, the firm noted that any marginal reprieve brought by a slight drop in home hunters is expected to be brief, with the beginning of a new year around the corner.
Domain’s chief of research and economics, Dr Nicola Powell, commented that despite the slight lift in figures in the nation’s three largest capitals, conditions are tough for renters and will continue to be for the foreseeable future.
“In the upcoming months, while we do expect to see a seasonal lift in vacancy rate as rental supply traditionally increases, it will be met with higher demands as the changeover period kicks off,” Dr Powell said.
“It has certainly been a tough year for renters. In 2024, we do anticipate the rental market to reach a tipping point driven by stretched affordability. More renters opting for house shares and first home buyer incentives will help transition some to being owners or fast-track others to a more affordable purchase,” she commented.
Positive momentum in Sydney and Melbourne – where vacancy rates lifted for the first time since June 2023 to sit at 1 per cent, and the average views per rental property declined somewhat – is welcome but not a cause for celebration. According to Domain’s economists, these cities need to see a “seismic shift in supply” for meaningful improvements to be felt by tenants.
In Brisbane, too, an 11-month has high received muted recognition, as the city’s vacancy rate still sits below 1 per cent, at 0.9 per cent. Hobart sits at a similar 0.8 per cent, dropping from 0.9 per cent last month.
Perth and Adelaide’s vacancy rates remain low at the extremely tight figure of 0.3 per cent, respectively, where they have each stagnated for the past four months.
Darwin and Canberra represented the capitals with the most available rental stock, at 1.5 per cent and 1.4 per cent respectively – both still lower than the target 3 per cent healthy range.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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