City rentals tighten
SQM Research reported today an increase in rental vacancy rates in Darwin, Canberra, Hobart, as well as many regional locations, as the long tail of the dwelling construction pipeline delivered some welcome relief to tenants.
There were significant increases in rental vacancy rates in many parts of regional Australia: Gold Coast, Mornington Peninsula, and the Blue Mountains, for example.
On the other hand there were sharp declines to very tight levels in CBD vacancy rates for Sydney, Melbourne, and Brisbane, as international students rushed back to Australia.
Overall, there is likely to be ongoing pressure in the rental markets of the larger capital cities as students return and as employers increasingly require employees to be back in the office.
Indeed there was no respite for renters in the largest capitals, with asking rents for units rising nearly 9 per cent in Sydney and Melbourne over the past quarter, while Brisbane wasn't far behind.
Source: SQM Research
Consumer sentiment surveys today reported sentiment mired at 30-year lows, while rising unemployment expectations underscored the growing need for a pause in interest rates.
Indeed OIS pricing of 96.55 for July implies a strong likelihood (essentially a 2 in 3 chance) of a 25 basis points cut interest rates in Australia by July.
In the US Federal Funds rate futures are also looking for interest rate cuts in the second half of 2023, in a remarkable about-face over the past week.
Back in Australia, the time to buy a major household item survey reading was the lowest since 1974, portending an imminent downturn for retailers in the discretionary segments.
Unsurprisingly business confidence was shredded in the NAB Business Survey, dropping from a reading of +6 to a reading of -4 in a single month.
SQM Research's media release on vacancy rates can be found here.
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The ASX 200 is trading back down at 6,950, but still is only a few per cent down from a year ago.
