Vacancy rate remains stable but rents rise
Expert says 'without a substantial increase in housing construction and rental stock, affordability pressures likely to persist'.
AUSTRALIA’s national residential vacancy rate has remained unchanged month-on-month but the rental situation continues to be bleak.
New data from SQM Research shows the residential vacancy rate at 1.2 per cent in May, with total residential vacancies increasing from 35,258 to 37,844 dwellings over the month.
“While vacancy rates rose in several capital cities, conditions remain tight overall, with all capital cities continuing to record vacancy rates below two per cent,” the report said.
On the rental front, national advertised rents continued to rise through June, with combined rents increasing 0.4 per cent over the past 30 days and 7.8 per cent higher year-on-year.
The national combined rent average now stands at $700.04 per week, while the capital city average has increased to $797.37 per week, supported by ongoing growth across most capital cities.
“Nationally, house rents rose 0.5 per cent for the month and 8.2 per cent over the year, while unit rents increased 0.3 per cent monthly and 7.3 per cent annually, reflecting sustained demand for both detached housing and medium-density accommodation,” the report said.
Louis Christopher, managing director of SQM Research, said where vacancies did rise across a number of cities, that largely reflects normal seasonal patterns.
“May and June are typically among the higher-vacancy months of the year, outside the December peak, as leasing slows over the cooler months,” Christopher said.
“On a year-on-year basis, the market is unchanged, sitting at the same 1.2 per cent it did in May last year.
“That said, vacancy rates remain exceptionally low by historical standards.
“Brisbane, Perth, Adelaide, Darwin and Hobart are all still recording vacancy rates below one per cent, indicating that rental supply remains severely constrained.
“At the same time, national asking rents are continuing to rise, up 7.8 per cent over the past year,” he added.
“Strong rental growth in cities such as Darwin, Hobart and Brisbane demonstrates that demand is still outpacing available supply.
“Sydney is marginally tighter than it was a year ago and Melbourne, while the most balanced of the major capitals, has also tightened over the past 12 months.
“Australia’s rental market remains fundamentally undersupplied. Without a substantial increase in housing construction and rental stock, and/or a meaningful decrease in population growth rates from current levels, affordability pressures are likely to persist through the remainder of 2026 and into 2027.”
