Vacancy rates across the country jumped during April, according to new figures from property research firm SQM, bolstering the opinion that more stock is filling the market and continuing to put downward pressure on prices.
The numbers also come just weeks after similar research from SQM found national stock levels of property has increased by 68% over the past year – and doubled in Melbourne.
The new figures show national vacancies rose from 1.6% in March 2011 to 1.8% in April. Vacancies have risen 1.4% over the last year.
The highest vacancy rates were found in Melbourne at 2.5%, followed by Darwin at 1.8%, Hobart at 1.7% and Adelaide and Sydney at 1.4% each.
Overall, there are 47,787 properties vacant, up by 6,135 compared to last month and by 10,177 over the past year.
And while the data may show that vacancies are increasing, SQM managing director Louis Christopher says the signs aren’t so good for renters, who are already stuck in a tight market.
He argues that as interest rate increases loom over the heads of prospective buyers, they opt to remain renters and don’t free up enough stock.
“SQM’s rental vacancy rates highlight the endemic problem of the various rental markets around the country. There really is a shortage of rental accommodation for a number of areas,” he said.
“I fail to see how this problem is going to be rectified anytime soon. The current housing downturn only aggravates this problem as many would-be home buyers hold off and rent for longer durations.”
But Andrew Wilson, economist for Australian Property Monitors, says the news gels with what his firm is seeing and takes an optimistic view.
“There are signs that vacancy rates in Melbourne are probably the softest in the country. Affordability constraints in several cities have softened buyer demand, and the other option is the rental market. In Sydney there is a shortage, and strong demand there for rental properties.”
“Melbourne is probably the best position for renters at the moment. These figures would certainly gel with our data. Melbourne has the highest number of properties on the market, and stock up for sale is growing as well.”
“I guess it’s a good sign that we may get stabilisation or adjustment going forward in terms of Melbourne housing prices, and we’re certainly seeing that in the rental side as well. We have new stock coming through, which will help on the supply side.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
