The latest data from SQM Research indicates the domestic residential property market experienced a boost in April, evidenced by a fall in vacancy rates in almost every capital city.
Overall, the vacancy rate fell from 2.1 per cent in March to 1.9 per cent in April, with the total number of residential properties available to be inhabited nationwide for the month totalling 66,411, down from 72,436 in March.
The Melbourne property market experienced the most significant improvement from March to April, with its vacancy rate falling from 4.4 per cent to 4 per cent during the month. Sydney witnessed a similar fall, with its vacancy rate being recorded at 3.1 per cent in April, a drop of 0.3 per cent from the prior month.
However, a more granular examination showed this trend was not enjoyed in the central business districts of either city. To this end, Melbourne’s CBD vacancy rate jumped to 8.3 per cent, while Sydney’s rose to 7.3 per cent, with both results being attributed to an oversupply of apartments.
“Suburban vacancy rates continue to fall and that is now encompassing inner-suburban regions. In contrast, rates for Melbourne and Sydney CBDs remain elevated with the loss of international student tenants combined with apartment oversupply,” SQM Research managing director Louis Christopher said.
“These were just about the only areas recording rises in vacancy rates, excluding [the Sydney suburb of] Liverpool.
“I believe we are also seeing the number of occupiers per dwelling falling, which is putting pressure on vacancies. People are also looking for larger properties as they work from home and not wishing to live together.
“The fall in national vacancies is surprising given there has been record first-home buyer activity and strong dwelling completions relative to the population expansion; demand for rental accommodations is still outstripping supply, which is having the effect of boosting rents in many locations and [making them] unaffordable to lower-income tenants.”
With regard to rental charges, asking rents for residential property increased during April in line with the drop in vacancy rates. The average recorded weekly asking rent for houses at the end of the month was $557, representing a 0.4 per cent rise, and $411 for units, reflecting a 0.2 per cent climb.
Key words:
Domestic residential property market, vacancy rates.
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