The property market continues to stagnate, with the weekend’s auction results and new data on vacancy rates suggesting price and rent growth will remain flat for the foreseeable future.
New vacancy rate figures from SQM Research show national vacancy rates have grown by 0.2% to 1.9%, with a total of 49,125 vacancies. But SQM managing director Louis Christopher says it is too early to draw any conclusions about the market’s future movements.
“We’re careful to make any conclusions, as the data tends to go up and down within a trading range. But it shows that overall, conditions are tough for renters.”
Vacancies increased the most in Melbourne, up by 0.4% to 10,086, with vacancies also up by 0.1% in Sydney, 0.3% in Brisbane, 0.2% in Adelaide and 0.2% in Perth. Canberra vacancies are up by 0.1%, while Hobart vacancies have remained flat and Darwin vacancies are down by 0.2%.
Christopher says that with no major capital city recording a vacancy rate over 3%, “we are still experiencing what SQM Research would consider to be a considerably tight rental market”.
However, he points out that some cities are faring better than others. The vacancy rate for Melbourne is now at 2.8%, suggesting “an equilibrium where neither landlords nor tenants have control”.
“I think this means that rents will be stagnant. Good for tenants, as it means they’re no longer going to see massive rent increases and they’ve got a little more chance for some relief. But in some other cities it will be a bit tougher.”
Meanwhile, auction rates around the country continue to remain subdued as buyers wait out the winter. In Melbourne, the clearance rate reached 59%, although Real Estate Institute of Victoria chief Enzo Raimondo said buyers will still be waiting until the weather warms up.
“An increase in listings is expected in spring and those vendors looking to sell at auction will welcome the small improvement in demand this weekend.”
There were a total of 443 auctions, of which 263 sold. However, Christopher says SQM has been noting a slower increase in stock levels indicating the bottom of the market may appear soon.
“We’ve seen prices continue to fall in Melbourne, and in some places more than others. The bottom may be coming.”
Elsewhere around the country, Sydney recorded a 63.5% clearance rate, with 146 reported auctions, with Adelaide and Brisbane recording clearance rates of 7.1% and 37.5% respectively.
Meanwhile, the amount of repossession writs in Victoria has risen to its highest level in more than two years, according to a new report from News.com.au. The number shows that more than 400 repossession writs have been sent in the past two months.
The figure comes after Fitch Ratings revealed earlier this year that delinquencies are increasing as home owners struggle with rising interest rates.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
