National vacancy rate hits 10-month high

The latest national rental vacancy figures show green shoots for the severely contracted market.

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According to PropTrack, the share of available rentals further increased in May, marking the third month of improvement for the nation’s rental market.

The national vacancy rate lifted 0.08 percentage points to 1.3 per cent – which is still far below what is considered a healthy level of availability.

But even while vacancies are still tight, the latest data could show that the market is moving in the right direction, with three consecutive rises in vacancies not recorded since late 2020.

Sydney and the ACT experienced the largest increases in rental vacancy rates in May, up 0.16 percentage points and 0.18 percentage points respectively.

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Perth, meanwhile, saw the largest increase over the past three months, with availability rising 0.40 percentage points.

However, all of Australia’s capitals, except Canberra, are still experiencing lower vacancies than before the onset of the COVID-19 pandemic.

Adelaide and Brisbane hold as the tightest rental market conditions, though they also saw a slight easing in May.

Regional markets saw a lower rise than the national average, at just 0.02 percentage points, which will nonetheless be good news to rental seekers with the regional vacancy rate sitting at 1.26 per cent.

PropTrack senior economist and report’s author, Paul Ryan, said that while the figures represent good news for renters, the reality on the ground means that competition will still be fierce.

“While any easing in conditions will be welcomed by renters, available properties remain very scarce with the vacancy rate at around half the levels seen before the pandemic. This means competition for rentals will remain strong and rents will continue to increase,” Ryan said.

“The easing in conditions over the past three months has been most evident in Perth, Sydney and the ACT, with Perth seeing a substantial improvement after very tough conditions recently.

“While availability remains low across all markets, Adelaide and Brisbane remain the toughest for renters, with rental vacancy rates of 1.03 per cent and 1.11 per cent, respectively. We expect renters will face continued difficulty securing rentals and strong rent growth over the rest of 2024 in these markets,” Ryan noted.

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