Building recovery leads to softer rental market
Landlords in the capital cities are experiencing flat rents and climbing vacancies as building completions increase the supply of available properties, according to new data from SQM Research.
The combined city vacancy rate hit 2.3 per cent last month, the highest April result ever recorded by SQM.
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Managing director of SQM Louis Christopher suggested strong activity in the construction sector may be impacting on the health of the rental market.
“With the national recovery in building approvals and completions, I can only surmise that the rental market is increasingly going to favour tenants over the next 12 months,” he said.
Vacancies rose in every city, with the highest rates recorded in Melbourne and Canberra.
Availability in both these cities is currently at 2.5 per cent, a 0.4 per cent increase on the previous month.
Perth and Brisbane were close behind, with 2.3 per cent of rentals empty.
The monthly increase comes to 0.4 per cent for Perth and 0.3 per cent for Brisbane.
Other cities saw more modest increases of below 0.2 per cent.
Sydney vacancies are currently at 1.7 per cent while Adelaide boasts the country’s tightest rental market, with rates of 1.5 per cent.
The increase in available properties also subdued rental growth in most cities, Mr Christopher said.
“As we predicted this time last year, rental growth is slowing to the point where we are recording a flat rental market and in some instances significant rental falls, as is the case with Perth and Canberra,” he said.
