SQM Research has released its May rental report, which shows that the national vacancy rate rose to 1.2% from 1.1% the month prior:
Source: SQM Research
Sydney recorded a rental vacancy rate of 1.4%, up from 1.2% in April. Melbourne’s vacancy rate also rose to 1.3%, up from 1.1% in April.
Commenting on the result, SQM Research managing director Louis Christopher noted:
“As forecasted in our last update, we have recorded an easing in rental vacancy rates for May, but the rental crisis is still far from over at this stage”.
“The immediate outlook is vacancy rates are set to rise somewhat into winter. This is the normal seasonality we get at this time of year so one should be a little careful about reading into these rises”.
“Nevertheless, it might provide some minor relief to tenants who still have excessive difficulties in finding longer term rental accommodation around the country”.
However, Christopher warned that the rental situation in Australia remains fraught:
“The full year outlook remains the same in that we expect overall tight vacancy rates to be with us for 2024, driven by a fall in dwelling completions relative to ongoing growing demand”.
The following chart from Justin Fabo at Antipodean Macro shows that rental vacancy rates remain at historical lows across most markets:
Nevertheless, SQM Research’s asking rents index recorded its first material decline in capital city advertised rents since April 2020.
Over the past 30 days, rents decreased by 0.5% across all capital cities, with falls in Sydney and an unchanged reading from Melbourne the main drivers.
However, the accumulated increase in asking rents remains disastrous:
CoreLogic’s rental index also recorded a moderation in rental growth over recent months, driven by slowing growth across the combined capital cities:
Source: CoreLogic
Therefore, the situation facing Australian renters remains depressing. But at least they have received some short term respite.
