Australia’s rental crisis refusing to go away
Tightening rental vacancy rates push rents for Sydney units up to an average of $841. And to an average of $640 in Melbourne, according to analysis by SQM.
RESIDENTIAL vacancy rates fell to 1.0 per cent in January – down from 1.6 per cent in December, new data shows.
That’s pushed rents up by 1.9 per cent for Sydney units – to an average $841 – and by 2.3 per cent for units in Melbourne where they are an average of $640, according to analysis by SQM.
The total number of rental vacancies fell sharply to 31,822, which is a significant drop from 47,336 in the previous month.
SQM managing director Louis Christopher said: “From a tenant’s perspective, the sharp drop in rental vacancies at the start of 2025 is highly disappointing, especially since there were some glimpses of a moderating rental market in the latter half of 2024. Is this a one-off abnormality?
“Unfortunately, I don’t think it is, as our records of February listings to date are lower than what was recorded in January.
“As a research house, we are aware of the ongoing under-building that has been occurring.
“Over and above this, our concern is what is not known. And that is the real-time, present level of overseas arrivals.
“Could there have been another surge in migration levels in recent weeks? We don’t know for sure, but clearly, something has driven this retreat in rental vacancies.”
After recording a period of rental easing over the second half of 2024, Sydney’s rental vacancy rate dropped back to 1.4 per cent, with 10,151 rental dwellings now vacant, compared to 15,263 in December.
Melbourne also recorded a sharp decline, with its vacancy rate dropping to 1.5 per cent, representing 8,047 vacant dwellings.
Brisbane recorded a rental vacancy rate of just 0.8 per cent, with 2,877 properties now available for rent.
This is the second-lowest rental vacancy rate ever recorded for Brisbane since SQM’s records began in 2005.
The record low of 0.7 per cent was registered in May 2022.
Canberra’s vacancy rate dropped to 1.3 per cent, while Perth and Adelaide remained stable at 0.4 per cent and 0.5 per cent, respectively.
Darwin experienced a decline to 1.1 per cent, while Hobart recorded its equal lowest rental vacancy rate ever recorded for itself and among the capitals at just 0.3 per cent.
