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Australia’s most popular rental suburbs revealed

02 MAR 2021 • By Cameron Micallef • 4 min read • Hotspots

Tenants should brace themselves for rental price hikes as tightening vacancy rates continue across the country, new research has revealed.

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According to Domain, outer regions in Sydney and Melbourne are continuing to outperform inner suburbs with migration disruptions seeing a rise in apartment rental listings. 

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In Greater Sydney, Camden, Wyong and the Blue Mountains continued to outperform, with vacancy rates at or below 0.5 per cent.

While rates in Sydney’s outer suburbs remain tight, in Melbourne the Mornington Peninsula, Nillumbik-Kinglake and Yarra Rangers all have vacancy rates of 0.3 per cent.

Lowest  vacancy rates across capital city areas – February 2021
Rank Sydney Melbourne Brisbane & Gold Coast Perth Adelaide
1 Camden, 0.4% Mornington Peninsula, 0.3% Caboolture Hinterland, 0.1% Wanneroo, 0.2% Tea Tree Gully, 0.1%
2 Wyong, 0.4% Nillumbik – Kinglake, 0.3% Capalaba, 0.2% Gosnells, 0.3% Gawler – Two Wells, 0.1%
3 Blue Mountains, 0.5% Yarra Ranges, 0.3% Nerang, 0.2% Armadale, 0.3% Marion, 0.2%
4 Gosford, 0.5% Cardinia, 0.4% Mudgeeraba – Tallebudgera, 0.3% Rockingham, 0.4% Playford, 0.2%
5 Wollondilly, 0.8% Casey – North, 0.7% Coolangatta,0.3% Cockburn, 0.4% Port Adelaide -East, 0.3%
Source: Domain
Note: The vacancy rate represents the portion of available, empty rental properties relative to the total stock of rental property. The rental vacancy rate is based on adjusted Domain rental listings and will be subject to slight revisions over time.

With the outer suburbs continuing to flourish, data from Domain put Melbourne’s overall vacancy rate at 4.7 per cent as of February 2021, which is almost three times above the 1.6 per cent recorded in 2020. 

Moreover, the Victorian capital recorded the biggest proportion of empty rentals in Australia, followed closely by Sydney. 

In Sydney, the only other city where the vacancy rate increased, the number of vacant rental listings increased by 9.1 per cent over the past year, with the overall vacancy rate expanding from 2.6 to 2.8 per cent. 

“Melbourne and Sydney vacancy rates have slid from the COVID-19 induced peak, indicating the worst is behind landlords,” Domain stated.

“However, annual vacancy rates remain higher, fuelled by prolonged lockdowns and higher vacancies concentrated in inner-city apartment markets due to a lack of international students and hard national border closures.” 

“Sydney’s and Melbourne’s rental markets are far from uniform; inner-city areas or those close to universities remain tenants’ markets while outer suburban areas continue to be landlords’ markets.”

Highest  vacancy rates across greater capital city areas – February 2021
Rank Sydney Melbourne Brisbane & Gold Coast Perth Adelaide
1 Parramatta, 4.9% Melbourne City, 11.7% Brisbane – Inner, 4.3% Perth City, 1.3% Adelaide City, 5.2%
2 Strathfield – Burwood – Ashfield, 4.5% Stonnington – East, 8.7% Sherwood – Indooroopilly, 3.7% Cottesloe – Claremont, 1.0% Prospect – Walkerville, 1.0%
3 Auburn, 4.2% Stonnington – West, 8.0% Brisbane Inner- West, 2.9% South Perth, 1.0% Holdfast Bay, 0.8%
4 Botany, 4.0% Whitehorse – West, 7.5% Nathan, 2.4% Canning, 0.9% Norwood – Payneham – St Peters, 0.6%
5 Pennant Hills – Epping, 3.9% Boroondara, 6.5% Mt Gravatt, 2.3% Melville, 0.8% Unley, 0.5%
Source: Domain
Note: The vacancy rate represents the portion of available, empty rental properties relative to the total stock of rental property. The rental vacancy rate is based on adjusted Domain rental listings and will be subject to slight revisions over time.

Nationally rates fall

While Sydney and Melbourne bear the brunt of higher vacancy rates, the rest of the country continues to see falling rental stock. 

Domain data puts the national vacancy rate at a steady 1.9 percent in February – its lowest level since the pandemic began.

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However, the data has indicated the existence of a two-paced market, with the number of vacant rental listings falling significantly in Brisbane, Darwin, Perth, Adelaide and Hobart over the past year.

“All other capitals have drifted below their vacancy rates from February 2020. This will be a welcome boost for landlords, especially those in Perth who have seen a stark turnaround in the vacancy rate in recent years, falling from 5.0 per cent in June 2017 to a mere 0.7 per cent in February 2021,” Domain concluded. 

Capital city rental vacancy rates – February 2021
Feb-21 Jan-21 Feb-20 MoM ∆ YoY ∆
Sydney 2.8% 2.9% 2.6% ↓ ↑
Melbourne 4.7% 4.6% 1.6% ↑ ↑
Brisbane 1.4% 1.6% 2.1% ↓ ↓
Perth 0.7% 0.7% 1.8% – ↓
Adelaide 0.6% 0.6% 0.8% – ↓
Hobart 0.5% 0.4% 0.6% ↑ ↓
Canberra 0.8% 0.9% 1% ↓ ↓
Darwin 0.8% 0.8% 3.2% – ↓
National 1.9% 1.9% 1.7% – ↑
Source: Domain
Note: The vacancy rate represents the portion of available, empty rental properties relative to the total stock of rental property. The rental vacancy rate is based on adjusted Domain rental listings and will be subject to slight revisions over time.

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RELATED TERMS

Capital
Capital refers to the financial resources that are available to be used for income generation.
Rates
Rates refer to a fixed price or an amount charged by sellers or providers for their goods and services.
Vacancy
A vacancy is a term that describes an unoccupied or empty space.
Cameron Micallef

Cameron Micallef

AUTHOR

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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