Rental vacancy rate dips in capital cities including Melbourne, Brisbane and Canberra at popular time for renters seeking a new property, PropTrack says
January provided no relief for tenants looking for a place to live as the number of vacant homes fell nationally, with Sydney worst hit, new data has revealed.
The national rental vacancy rate was at 1.09% in January, falling 0.04 percentage points over the month, according to the latest PropTrack Market Insight report.
It was 0.26 percentage points lower year-on-year.
Capital cities drove the fall, dropping 0.08 percentage points over the first month of the year.
It was the second-lowest level on record for the combined capital cities in January, the PropTrack economist and report author Anne Flaherty said.
“The trend is a result of population growth outpacing the speed at which new housing is being developed”, Flaherty said.
“With dwelling approvals and commencements at decade-low levels, this is unlikely to change anytime soon.”
The start of the year is also a popular time for tenants looking to move into a new rental property.
The sharpest drop in the rental vacancy rate was felt in Sydney, which recorded a 0.08 percentage point decline, reaching 1.20%.
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The median price on for rentals in Sydney was $900 a week between February 2023 and January 2024, up 20% on the year before.
Sydney’s rental market is extremely competitive, with many renters met with exorbitant prices while struggling to find suitable housing.
In some instances, renters have turned up to inspections only to find the landlord or current tenants have turned a single bedroom into a shared bedroom, while charging the same amount of money per person.
Katia Pearsall, a 27-year-old renter in Sydney, said that in one share house she inspected “there was like three beds in a bedroom”.
Pearsall was attending up to 20 inspections a week. One share house offered her a room, but then ghosted her three days before she was meant to move in.
“In three weeks, I met with over 30 people just for a room rental … and when I was turning up there were just so many people there at once,” she said.
Before Christmas, Pearsall secured a room in a share house that was within her budget, where she has lived for the last month.
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“Yesterday we got hit with a rental increase notice and it’s a 32% increase,” she said. “So I am out again looking for another place.”
Conditions are also tighter for renters in Melbourne, where the vacancy rate hit a record low of 1.15% – the largest annual fall of the capital cities compared to a year ago, with a 0.29 percentage point decline.
Rental conditions have deteriorated in Brisbane, Hobart and Canberra. Perth continues to hold the lowest vacancy rate in the country at 0.76%, which has remained relatively stable over January, rising 0.02 percentage points.
There has been some relief for renters in Adelaide and Darwin, and across regional areas.
The new data comes as affordable housing advocates continue to call for government investment in social housing.
“Australia’s actually never had more homes per person than it does now”, Maiy Azize, a spokesperson for Everybody’s Home, said.
“But the system that we’ve got just isn’t creating a situation where those rentals are becoming available to people who actually need them.”
Azize has long been calling for the government to ensure 10% of the housing market is social housing.
“The government has totally lost any ability to drive affordability outcomes, because it’s got no footprint in the market any more. It’s totally reliant on private rental.”
With fewer rental properties currently vacant, tenants were facing stiffer competition, Flaherty said.
“This is likely to drive rents higher over the course of 2024, though we expect the pace of growth to slow.”