Rental vacancy rate approaches record low
Australia's national residential vacancy rate fell to under 1 per cent last month.
This happened once before, more than 16 years ago, but we're heading to record lows now as the spring has sprung and overseas arrivals begin to storm back.
There were some very, very low vacancy rates in Adelaide (0.3 per cent), Perth (0.4 per cent), Darwin (0.6 per cent), Canberra (0.9 per cent), Hobart (0.5 per cent), and Brisbane (0.7 per cent).
That having been said, the monthly change is now being driven by a mass return to Sydney (down from 1.5 per cent to 1.3 per cent) and Melbourne (down from 1.6 per cent to 1.4 per cent).
I've found it's sometimes useful to smooth out the noise with some rolling 6-monthly data to show the trend.
Back to the cities
A few other graphs courtesy of the legends at SQM Research.
While the Mornington Peninsula is softening, the Melbourne inner-city is filling up again fast.
Source: SQM Research
The same applies to Melbourne's inner suburban areas.
Source: SQM Research
In New South Wales, rental vacancies are trending higher on the Central Coast, and particularly in Wollongong.
But, just like in Melbourne, the inner city is now filling up again.
Vacancy rates are also tightening fast in the eastern suburbs, inner west, and lower north shore of Sydney.
Brisbane arguably faces the biggest rental crisis next year, as tax and other rental property rules are set to change, with the gluts of 2016 being followed by epic shortages.
Source: SQM Research
The wrap
Overall, there are some extremely tight rental markets around the country now, with yet another construction firm going to the wall yesterday in Queensland (Beech this time, following Artstruct late last week).
Construction insolvencies normally peak in the final quarter of the calendar year, and on the current trend it looks like there will be a record high number of building insolvencies in Q4 at well over 500 firms becoming insolvent.
Capital city asking rents rose another 2.6 per cent over the past month to be more than 20 per cent higher year-on-year.
Unfortunately the problem is going to get much worse, with a range of rules and regulations coming into force to make life incrementally less attractive for landlords.
Some are turning to Airbnb or short-stay lets to cover their rising costs, and others are simply choosing to sell, just as immigration is about to soar to a record high.
SQM's weekly data points to further significant declines in rental vacancies over the period ahead.
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SQM Research provides its detailed media release here.
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