SQM Research has updated its rental vacancies time series for June, which reveals that Sydney’s rental vacancy rate has hit the highest level in the series’ 13.5 year history at 2.8%.
Here’s how the raw data looks compared against the rest of the nation:
And here’s the data presented in trend (3MMA) terms:
The rise in Sydney’s rental vacancy rate follows a strong surge in dwelling construction, albeit amid rampaging immigration-fuelled population growth:
As shown in the next chart, actual dwelling additions (i.e. accounting for demolitions) has managed to outrun population growth:
And this has driven the ratio of population growth to dwelling additions to 2.2 – the lowest level in at least five years:
The rising rental vacancies are hitting Sydney rental rates, with CoreLogic reporting falling rents over the June quarter and flat rents over the year:
Whereas SQM Research’s asking rents series is also reporting falling rents:
This is a nightmare scenario for Sydney’s army of highly-leveraged landlords, who are facing falling rental returns on top of falling dwelling values:
This is only the beginning.
