Australia’s national vacancy rate hit a new record, falling to just 1.1% in February, down 0.2% month-on-month.
According to Domain’s latest vacancy rate report, the falling figure is the lowest on record since the company began tracking the metric in 2017.
All state capitals except Adelaide and Hobart saw declines in rental housing availability in February, with Tasmania and South Australia’s major metropolis stabilizing at historic lows (0 .2% and 0.3%, respectively).
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Melbourne remains the nation’s most-stocked capital when it comes to rental availability, with data showing the world’s former most livable city has a vacancy rate of 2.1% (down 0.3% compared to January).
However, while the country’s second most populous city still offers the best option in terms of choice for potential tenants, Melbourne’s vacancy rate has more than halved over the past 12 months, clearly demonstrating a strong post-pandemic recovery.
Sydney’s rental supply tightened further in February, falling a further 0.2% to now stand at just 1.7%.
This represents a much lower vacancy rate than Sydney’s pre-pandemic rental market. In fact, according to Domain, it’s Emerald City’s lowest since November 2017.
Canberra, Brisbane and Perth, like Tasmania and Adelaide, have seen historically low vacancy rates, with the nation’s capital down to just 0.5%.
The spiraling vacancy rate has turned the rental market sharply in favor of tenants, with the lack of supply likely to be further punctuated by a looming phenomenon Australia hasn’t witnessed since the start of the pandemic. .
According to Nicola Powell, head of research and economics at Domain, the reintroduction of international migration is likely to make Australia’s vacancy rate significantly worse, and could even send it into real trouble.
“Australia is on the brink of a rental crisis as rental demand is likely to soar after international borders open to fully vaccinated travellers, following two years of closures,” Dr Powell said.
“This resurgence in rental demand will primarily affect Sydney and Melbourne, the two cities that will see the biggest declines in vacancy rates in February.”
Dr Powell added that the impending influx of travelers from around the world would likely have another ripple effect, making the rental crisis even worse for some.
“Tenant choice will decline further as some landlords convert investment properties into short-term vacation rentals. This should further tighten the rental market,” Dr Powell said.