Despite a decline in the national vacancy rate, asking rents for houses across Australia’s capital cities have fallen.
New figures from SQM Research reveal the capital city average asking rent declined by 0.7 per cent for houses, but rose by 1.2 per cent for units in the 12 months to February 2014.
Canberra and Perth recorded the steepest declines, with the national capital experiencing a 7.6 per cent decrease in asking rents for houses and a 5.5 per cent decline for units. Perth’s asking rent for houses dropped by 10.7 per cent and units dropped by 7.4 per cent.
SQM Research’s managing director Louis Christopher said Canberra’s decline can be explained simply: government job cuts in the city have seen an exodus of residents from the area. Perth’s negative result could be attributed to the downturn in the mining boom and the corresponding decrease in demand for rental dwellings.
Sydney was the standout performer with a 2.3 per cent increase in asking rents for houses and a 3.6 per cent increase in asking rents for units on a yearly basis.
Mr Christopher said the results were a mixed bag for investors.
“Overall rental conditions continued to modestly favour landlords over the course of the month… It has been some time since we recorded a definitive decline in vacancies in what could be a sign that excess stock seen in Melbourne is starting to be occupied. Meanwhile the sharp falls in rents for Perth are in line with the rising vacancies being recorded there and are a manifestation of a rather rapid decline in demand for accommodation,” he said.
The national vacancy rate dropped from 2.2 per cent in January to 2.1 per cent in February.