Massive increase in vacancy rates
Vacancy rates have more than doubled in one capital city over the past 12 months, with new research indicating that landlords are being forced to reassess their rental income situation.
The national vacancy rate fell slightly in August, according to SQM Research – but that doesn't tell the full story of what’s been happening in Australia’s northernmost capital over the past year.
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Darwin’s vacancy rate remained steady in August, sitting at 3.5 per cent with 993 properties listed as vacant. However, that figure represents a two per cent increase year-on-year (from 1.5 per cent) and compares to a current national vacancy rate of 2.3 per cent, based on 71,254 vacancies.
Perth hasn't fared any better, edging out Darwin for the title of highest vacancy rate in Australia.
Its vacancy rate only dipped slightly to 3.7 per cent in August, down from 3.8 per cent the month before. But Perth was sitting on a vacancy rate of 2.6 per cent at the same time last year, meaning a 1.1 per cent increase has taken place over the past 12 months.
Landlords in both cities have also been forced to compromise on asking rents, according to SQM Research.
"Notably, Darwin has recorded a fall in asking rents of 21.3 per cent for houses and 17.8 cent for units for the past 12 months," SQM Research director Louis Christopher said.
"Yearly falls have also been recorded in Perth, with asking rents down 8.1 per cent for houses and 5.5 per cent for units," he added.
Other capital cities experiencing an increase in their vacancy rates over the past year include Adelaide, Brisbane and Canberra, with the former two showing signs of levelling out.
Adelaide’s vacancy rate increased by 0.3 per cent to 1.9 per cent – the same rate recorded last month.
Brisbane matched this performance, with vacancy rates shifting from 2.3 per cent to 2.6 per cent over the year. This vacancy rate is also unchanged from last month.
Vacancy rates in Canberra underwent a smaller shift, moving from 2.3 per cent to 2.4 per cent year-on-year but down from 2.5 per cent last month.
All remaining capitals experienced a drop in vacancies over the year.
Hobart recorded the most significant decrease, with rates dropping 0.5 per cent to 1.1 per cent year-on-year (down from 1.2 per cent last month).
Melbourne’s vacancy rate fell from 2.6 per cent to 2.2 per cent from August last year, down from 2.3 per cent last month.
Sydney’s vacancy rates experienced the smallest discrepancy year-on-year, shifting from 1.8 per cent to 1.7 per cent.
Speculating on the national market outlook, Mr Christopher said the slight dip in vacancy rates was a short-term phenomenon.
"There was a slight fall in vacancies this month; however, I am still of the opinion that vacancies will gradually rise from here over the next 12 months," he explained.
"Already there has been a noticeable impact upon the rental market with rents in most cities recording slower rental growth rates or, in some cases, recording falls in rents. It is only the tourist destinations, such as the Gold Coast and Hobart, which are recording stronger rental conditions."
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