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Beyond the Numbers: What 1.2% Vacancy Rate Means for Australian Renters in 2024

You’re probably feeling the squeeze if you’re currently hunting for a rental in Australia. The latest data from SQM Research confirms what many renters already know: finding an affordable rental home isn’t getting any easier.

The Big Picture: Vacancy Rates Continue to Fall

September brought another twist in Australia’s ongoing rental crisis, with national vacancy rates dipping to 1.2%, down from 1.3% in August. To put this in perspective, we now have just 37,932 vacant properties across the country – a number that seems impossibly small when considering our growing population.

A Tale of Two Cities (Actually, Eight)

The rental landscape varies significantly across our capital cities, so let’s break down what’s happening in each market:

The Tight Markets

  • Perth is practically bursting at the seams with a mere 0.6% vacancy rate
  • Adelaide matches Perth’s tight market at 0.6%
  • Hobart has seen vacancies plummet to 0.8%
  • Brisbane remains tough at 1.1%

The (Slightly) Easier Markets

  • Darwin sits at 1.0%
  • Sydney holds steady at 1.6%
  • Melbourne shows some breathing room at 1.7%
  • Canberra leads the pack with 2.0% vacancy

Rent Prices: Where Are They Heading?

The past month has given us some interesting movements in rental prices:

Winners and Losers

🔺 The Risers

  • Perth leads the charge with a 1.7% increase
  • Brisbane follows with a healthy 1.5% jump
  • Sydney shows renewed strength with a 0.9% rise

🔻 The Fallers

  • Darwin takes the biggest hit with a 4.5% drop
  • Canberra’s house rents tumbled 3.4%
  • Melbourne eased by 1.1%

CBD Markets: A Different Story

Our city centres tell their own tale. If you’re looking in the CBDs, you’ll find significantly higher vacancy rates:

  • Sydney CBD: 5.0%
  • Melbourne CBD: 5.1%
  • Brisbane CBD: A tighter 2.4%

What’s Driving These Changes?

The elephant in the room is population growth. Earlier predictions suggested migration would slow to meet Federal Budget targets, but that hasn’t happened. We’re now looking at population growth exceeding 500,000 people this calendar year – a figure that keeps putting pressure on our already strained rental market.

What Does This Mean for Renters?

If you’re hoping for relief from high rental prices, you might need to adjust your expectations. While we’re not seeing the dramatic rent increases of recent years, the market remains in what experts call a “severe shortage.” Unfortunately, this isn’t likely to change significantly for several years.

Looking Ahead

While we expect another seasonal dip in vacancy rates in October, there’s a silver lining: rental price growth has eased in recent months, and we’re not anticipating any dramatic acceleration in rents for now. However, with population growth continuing to outpace the housing supply, the fundamental challenges in our rental market are likely to persist.

The Bottom Line

For renters, the message is clear: we’re still in a challenging market. For investors, the tight conditions continue to favour landlords, particularly in cities like Perth and Brisbane where growth remains strong. And for policymakers, these numbers underscore the urgent need for solutions to Australia’s housing shortage.

Do you have thoughts about the rental market in your area? How are these changes affecting you? Share your experiences in the comments below.


Data source: SQM Research, September 2024 Report

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