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Tuesday, 18 September 2018

Canberra vacancy rate falls again

Canberra tightens again

You expect a bit of chirp if you write about real estate.

Nobody can disagree that the financialisation of shelter is lamentable, and sometimes it's crazy how housing prices and auction clearance rates are reported like footie results.

However, this is only going to get worse.

It's inevitable because long-term migration to Australia is at a record high, yet the government supplies almost no new dwelling stock for the new renters. 

And if the prospective returns are poor, landlords won't invest - it's that simple. 

A policy decision was taken years ago that landlords would have to supply the rental stock, although there was a temporary flicker of activity during the financial crisis Rudd stimulus when the government actually built some public housing. 

A bit of chirp is one thing but strangely nothing generates more vitriol than discussion about land tax.

My view has occasionally been that excessively high land tax in the ACT will lead incumbent investors to sell, while new property investors will look elsewhere (they could literally hop over the border into 'Quangers' - and in fact this is happening, with investor loan finance in Canberra imploding). 

The counter-argument is that properties don't go anywhere and someone has to buy them - which is true, but of course it's the net flow of rentals versus renters that matters. 

Whatever, I'll just report the numbers.

After all, it could take a full cycle for the full impacts to be revealed - for example, higher rents could see investors return, and so on. 

SQM Research reported that Canberra's vacancy rate fell again to just 0.7 per cent in August, continuing a sweeping 3-year downtrend from 2.4 per cent in August 2015. 

On a 6mMA basis Brisbane has continued to trend down throughout every month of calendar year 2018 to date and internal migrants head north. 

Sydney's vacancy rate was still at 2.8 per cent in August, well up from a year earlier as the new supply comes online and needs to be abosrbed, while Melbourne was much tighter at 1.6 per cent. 

Very tight in Hobart, and increasingly Adelaide, while Perth is coming down from the stratosphere.

Nationally the vacancy rate was down from 2.2 per cent a year earlier to 2.1 per cent.