- Some locations have virtually no rental supply as vacancy rates continue to tighten in a competitive market
- Four city locations had residential vacancy rates of less than 0.1 per cent in May, with the remaining top ten having vacancy rates of less than 0.2 per cent
- Nationally, all cities have lower than pre-pandemic vacancy rates, except Sydney and Melbourne, but rates are declining
- Rates have decreased to 1.6 per cent in June for the third month in a row, the lowest level since the start of Domain records in 2017
Rental vacancy rates across the country have been tightening since the onset of the pandemic in early 2020, with some areas now having virtually no supply.
According to Suburb Trends’ research, four city locations had residential vacancy rates of less than 0.1 per cent in May, with the remaining top ten having vacancy rates of less than 0.2 per cent.
In fact, such low vacancy rates, according to Your Property Your Wealth director and buyer’s agent Daniel Walsh, indicate markets with virtually no rental supply, with the most undersupplied regions simultaneously being among the most inexpensive for tenants.
“The research found that the 10 city suburbs with the lowest vacancy rates for rental houses all had median weekly rents of $340 to $450 in May,” he said.
“This shows the dire situation for many tenants who are struggling to secure an affordable rental property in our capital cities because the supply has mostly dried up.”
Greater Brisbane has four of the country’s most undersupplied city rental home markets, followed by Greater Perth and Greater Adelaide with two each, and Greater Hobart, Greater Sydney, and Greater Melbourne with one each, according to the study.
The most undersupplied locations, with a vacancy rate of just 0.1 per cent were Wanneroo (Perth), Onkaparinga (Adelaide), Loganlea – Carbrook (Brisbane), and Hobart – North West (Hobart) in May.
Mr Walsh predicted that the rental shortage in Greater Brisbane will worsen before it improved, given that the region is attracting the lion’s share of interstate migration, with a nett increase of 5000 persons in the December quarter alone — the most since 2002.
Nationally, all cities have lower than pre-pandemic vacancy rates, except Sydney and Melbourne that have a vacancy rate of 2.6 and 3.6 per cent, respectively, according to Domain.
Rates have decreased to 1.6 per cent in June for the third month in a row, the lowest level since the start of Domain records in 2017.
Out of the eight capital cities, the five smallest have recorded vacancy rates below one per cent, however, the number of empty rentals have reduced significantly in Sydney and Melbourne.
“This will boost confidence among landlords, as renters face increased competition among remaining rental listings, but there will be some areas that will have elevated vacancy rates until international borders reopen,” Domain senior research analyst Dr Nicola Powell said.
Mr Walsh said that while investor activity had increased since the beginning of the year, it was still below historical levels, implying that the rental undersupply scenario would not improve in the near future.
“Rental markets were heading into undersupply territory long before the pandemic,” he said.
“This was because of the overly restrictive lending criteria that was implemented more than four years ago, which greatly reduced the normal flow of investment activity in the market.
“Now, the fallout of that policy has come home to roost, with hundreds of city suburbs across the country having very few rental properties available for prospective tenants.”
| Sub Region (SA3) | Capital | LGA | Property Type | May Vacancy Rate (1m) | Lease Median (12m) |
| Wanneroo | Greater Perth | Wanneroo (C) | House | 0.1% | $380 |
| Onkaparinga | Greater Adelaide | Onkaparinga (C) | House | 0.1% | $350 |
| Loganlea – Carbrook | Greater Brisbane | Logan (C) | House | 0.1% | $410 |
| Hobart – North West | Greater Hobart | Glenorchy (C) | House | 0.1% | $430 |
| Redcliffe | Greater Brisbane | Moreton Bay (R) | House | 0.2% | $400 |
| Salisbury | Greater Adelaide | Salisbury (C) | House | 0.2% | $340 |
| Stirling | Greater Perth | Stirling (C) | House | 0.2% | $380 |
| Frankston | Greater Melbourne | Frankston (C) | House | 0.2% | $340 |
| Sandgate | Greater Brisbane | Brisbane (C) | House | 0.2% | $435 |
| Narangba – Burpengary | Greater Brisbane | Moreton Bay (R) | House | 0.2% | $340 |
| Richmond – Windsor | Greater Sydney | Hawkesbury (C) | House | 0.2% | $450 |
Source: Suburb Trends and Your Property Your Wealth