Rental vacancies rise during winter slowdown

Rental vacancies ease

Something we discussed on the podcast last week was a likely increase in rental vacancies during the middle of the year.

Rental markets are more flexible and adaptive than we tend to think, and although markets have been extremely tight over the past year, the market is adjusting, and with more people leaving the country than entering through May and June rental vacancy rates increased from 1.2 per cent to 1.3 per cent. 

SQM Research statistics showed Sydney recording an increase in rental vacancy rates from 1.4 per cent to 1.7 per cent, while Melbourne's vacancy rate increased from 1.3 per cent to 1.5 per cent.

SQM's figures are below:

Source: SQM Research

The trend is fairly flat still, except in Hobart where the rental market is probably easing a little.

Asking rents increased only +0.1 per cent in the capital cities and +0.3 per cent nationally over the month, pointing to lower inflation ahead (construction costs are also now rising at the slowest pace in 22 years).

It's likely that the market will be tighter again in the busier summer months, and during the summer term for international students, given that we have nearly 3 million temporary visa holders in Australia these days.

You can find SQM Research's media release here. 

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Canada's inflation rate fell to 2.7 per cent in June, with markets pricing a 93 per cent chance of a cut next month.

The UK's 2-year bond yield fell to under 4 per cent for the first time this year, and even Australia's 3-year bond yield is now trading back with a 3-handle. 

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