The extremely tight residential rental market across Australia’s capital cities shows signs of easing.
CoreLogic Australia’s recent Housing Chart Pack reveals national vacancy rates now sit at 1.8%, an increase of 40 basis points from 1.4% a year ago. While this increase is encouraging for renters, the current vacancy rate of 1.8% still sits 1.5 percentage points below the pre–Covid five-year average.
A key factor contributing to the easing of rental vacancy rates is that the peak for net overseas migration has passed, which directly impacts the rental market in Australia.
Delving into these figures a bit closer, Brisbane and Adelaide have experienced the most notable increases, with vacancy rates rising 60 basis points over the last year to 2.1% and 1.1%, respectively. Other capital cities have also seen increases: Melbourne is now at 1.5%, Sydney at 2.2%, Perth at 1.2%, Canberra at 2.4%, and Darwin at 2.7%.
Adelaide and Perth remain the tightest rental markets. Perth, in particular, is 4.6 percentage points below the pre-covid five-year average of 5.8%. One of the most subdued markets is Canberra, with a vacancy rate of 2.4%, slightly above its pre-covid five-year average of 2.1%.
While the gradual easing of national vacancy rates is good news for renters, there is still some way to go before we are back into a balanced market. A 3% vacancy rate is generally considered equitable, where landlords and tenants have similar bargaining power.