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A new report showed that the country’s rental vacancy rate has returned to a record low in January, further shifting the market’s balance in favour of landlords and indicating an uphill battle for renters in the short term.
Only 0.8 per cent of rental properties were available to lease across the country during the first month of 2023, according to the latest data from Domain, down from the 1.1 per cent recorded in December.
Perth and Adelaide emerged as the most competitive rental markets during the month, as their vacancy rates dropped to 0.3 per cent.
The figures are the lowest on record for the Western Australian Capital, while the South Australian capital’s vacancy reading is marginally higher than the record low of 0.2 per cent last seen in October.
Sydney and Melbourne’s vacancy rates simultaneously declined to 1 per cent in January from 1.4 per cent in December, representing a record low for the Victorian capital and an equal record for the harbour city.
Over the month, vacancy rates in Brisbane and Darwin fell by 10 basis points (bps) to 0.8 per cent and 1.3 per cent respectively. In Canberra, the percentage of available rental vacancies fell by 20 bps to further tighten to 1.5 per cent during the same period.
Hobart was the only capital city to record an increase over the month, with vacancy rates in the Tasmanian capital rising from 1.4 per cent in December to 1.5 per cent in December.
Even the combined regional markets posted a lower vacancy rate in January, down to 0.8 per cent from 0.9 per cent in December.
Following the seasonal increase in vacancy rates over the year-end period, the report highlighted that supply in the rental market continued to deteriorate as demand skyrocketed.
“Low supply is driving a landlords’ market across all capital cities, worsening an ongoing rental crisis in many parts of the country,” the Domain report said.
The continued growth in asking rents, along with increasing demand, exacerbates a highly competitive environment for tenants.
Furthermore, the return of international and domestic travel, overseas migration, and foreign students intensified the rental demand pressures, resulting in a more competitive market for potential tenants.
The recent decision by China’s Ministry of Education to no longer recognise online degrees is also expected to result in a boost in the demand for rental properties as students go back to attending in-person classes.
Annually, data showed vacant rental listings are 35.1 per cent lower, hitting an all-time low for the month of January.
Rental listings declined in most capital cities, with Melbourne posting the biggest year-on-year drop of 61.1 per cent.
Overall, capital cities reported an annual fall of 47 per cent in vacant rental listings despite the increase in rental supply recorded in Hobart, Canberra, and Darwin.
Across regional markets, vacant rental listings went up 25.1 per cent higher than in January last year.
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