Rent rises in capital cities to become increasingly difficult

Landlords in Australia’s big cities may be losing the upper hand as conditions swing in favour of tenants.

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The national vacancy rate remains elevated, with the dramatic increased recorded in April easing by only 0.1 per cent in May, according to SQM Research.

Overall, the national rate is sitting at 2.2 per cent.

“This result clearly reveals that last month’s jump was indicative of a genuine increase in rental dwellings onto the market, and not merely seasonal spike,” SQM managing director Louis Christopher said.

Canberra, Melbourne and Darwin were the only capital cities to record decreases in vacancies over the month.


Nonetheless, Canberra and Melbourne continue to have the highest rates in the country at 2.4 per cent and 2.3 per cent respectively.

Perth and Brisbane stayed flat, sitting at 2.3 per cent over the month.

Results were slightly more favourable for landlords in Sydney and Adelaide, where rates were at 1.7 per cent and 1.6 per cent.

In the current soft conditions, the average capital city rents have stagnated as well.

Mr Christopher said soft conditions would continue over coming months, with landlords losing power in the market.

“Rental growth so far this year has been patchy as a result of the moderate increase in supply of available rental properties and I believe vacancy rates will continue to gradually rise over the course of 2014, with the longer term view that the large increases in building approvals will translate to higher vacancy rates in 2015 and 2016,” he said.

“Overall it is going to be increasingly difficult for landlords to lift the rent for the foreseeable future.”

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