SQM Research has released its rental vacancy report for August, which recorded a 1.3% vacancy rate nationally, the same rate as July and a 0.1% rise year-on-year:
Source: SQM Research
The overall number of rental vacancies in Australia was 39,665 in August, down slightly from 39,701 in July 2024 but up from 35,425 in August 2023.
The following chart from Justin Fabo of Antipodean Macro plots the small rise in vacancy rates across the capital cities over recent months:
Meanwhile, asking rents recorded by SQM Research have slowed after explosive growth over recent years, growing by just 0.7% over the quarter:
Source: SQM Research
The next chart from Justin Fabo shows the trend slowing in asking rents, especially for units:
SQM Research founder and managing director, Louis Christopher, warned that the rental market remains in “severe shortage”, meaning the crisis will persist for “some years”:
“National rental vacancy rates fell slightly in August, and we are now expecting further falls in vacancies through spring, however, this will be just a seasonal change and so we are not anticipating a reacceleration of rents, which have eased in recent month”.
“Overall, the national rental market remains in severe shortage and barring some exceptions, is not expected to materially soften out of the rental crisis for some years”.
“However, much of the structural rental shortage has now been priced into the rental market and so I do believe the days of 10-20% plus annual rental increases have come to an end”.
The key problem facing renters is summarised in the following chart:
Australia’s population expanded by 656,000 in 2023-24 against dwelling completions of only around 170,000 (which excludes demolitions).
So long as the nation’s population continues to expand so aggressively through net overseas migration, the rental crisis will persist.
