February Vacancies Fall, Rents Drop in Some Cities
By Louis Christopher on 23 Mar 2015
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Figures released by SQM Research this month have revealed the number of residential vacancies edged down across the nation in February 2015, with a vacancy rate of 2.2% posted based on 66,094 vacancies, down from 2.3% in January when vacancies were 69,847.
Falls were recorded in most capitals cities. Over the month, vacancy rates fell the most in Melbourne and Canberra as workers and students poured into the nation’s capital and second largest city ready to start the working and tertiary year following the summer break.
During February, the vacancy rate fell the most in Melbourne, down 0.5 percentage points from January, followed by a fall of 0.4 percentage points for Canberra. Hobart recorded the tightest vacancy rate at 1.3%, unchanged from January, based on 358 vacancies, and down from 1.6% a year earlier.
Over the year to February 2015, Canberra posted the biggest yearly decline in its vacancy rate to 1.6% from 2.1%, reflecting the relatively strong jobs market in that city, with an unemployment rate of just 4.5% compared to the national rate of 6.3%. Modest falls were also posted in Melbourne and Hobart.
Vacancy rates in Darwin and Perth will probably keep climbing through 2015 and could edge up nationally if the jobless rate rises further.
In contrast, the vacancy rate kept climbing in Darwin, the highest in the nation, followed by Perth, reflecting the impact of the commodities downturn, which is weighing on employment and property markets in Western Australia and the Northern Territory.
Managing Director of SQM Research, Louis Christopher, said vacancy rates in Darwin and Perth will probably keep climbing through 2015 and could edge up nationally if the jobless rate rises further.
“While unemployment fell slightly in February, a slowing Australian economy overall will likely place greater upward pressure on the nation-wide vacancy rate though 2015. Ongoing weakness in commodity prices will filter through to the jobs and property markets in Perth and Darwin.
“Nationally, a continuation in below-trend economic activity will likely push the unemployment rate up towards 7%, which will ultimately work to keep a lid on vacancy rates and rents in other capital cities,” Mr Christopher said.
SQM Research data shows asking housing rents in Perth, Canberra and Darwin have dropped over the year to March 12.