The national rental vacancy rate has hit a new record low, with new data showing rental conditions worsening in Sydney and Melbourne.
Australia’s vacancy rate hit a new low in October, falling 0.06 percentage points to 1.02% over the month, according to the latest PropTrack Market Insight Report.
That’s a new record from the 1.10% recorded in September, and well below 3%, which is seen as a healthy vacancy rate.
The data comes as affordability advocates push for stronger rental reforms including limiting the amount rent can be increased by each year.
Low supply and strong demand have created skyrocketing rents, with the national median on realestate.com.au for the last quarter sitting at $550, up 14.6% from the year before.
The PropTrack economist and report author, Anne Flaherty, said the vacancy rate had hit a new record low.
“Just 1.02% of rentals were vacant in October, with vacancies down in both capital city and regional areas and record lows reached in New South Wales, Victoria and Queensland,” Flaherty said.
“The national vacancy rate has been trending down for well over three years now – a trend that looks likely to continue off the back of strong population growth and a slowdown in the supply of new housing.”
Melbourne and Sydney have seen the sharpest falls in available rentals over the past 12 months, with vacancy down 0.55 ppt and 0.35 ppt respectively, she said.
Perth’s vacancy rate has fallen to 0.7%, Brisbane’s is sitting at 0.87%, Adelaide’s is at 0.67% and Hobart’s is 1.21%. Darwin was the only city to see a significant rise in vacancy, which jumped 0.68 ppt to 2.47%.
Flaherty said high dwelling prices and continued increases in interest rates were keeping first homebuyers out of the market.
“It’s going to be a really challenging few years,” she said. “It’s going to become more expensive to rent. It’s going to be more expensive to be a homebuyer as well. So I think that people are going to be forking out more to pay for housing.”
As a new wave of people are locked into lifelong renting, a limit on rent increases is essential to keep people out of poverty, the Everybody’s Home spokesperson, May Azize, said.
“Rental rules across Australia are a relic from an era when renting was temporary,” she said. “But more and more people will be renting for life, and they will not be able to manage huge rent increases every year.”
She called on governments to put a limit on rent increases and enforce them.
“It should not be up to tenants to take their landlord to a tribunal to make sure the rent they’re paying is fair,” Azize said.
“The recent national cabinet meeting was a lost opportunity for the federal government to show leadership on the rental crisis. It’s not too late for them to step up and right that wrong as part of the new national plan.”
