Rental Vacancies Climb, With CBD and Mining Towns Worst Hit

By Louis Christopher on 27 Jan 2014
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Rental Vacancies Climb, With CBD and Mining Towns Worst Hit

Data shows vacancy rates rose in December
Photo: The Homepage

Figures released by SQM Research reveal that the level of residential property rental vacancies rose during the month of December, recording at a vacancy rate of 2.6 per cent and coming to a total of 73,082 vacancies nationwide.

This represents a 0.4 percentage point increase month on month and a 0.3 percentage point increase year on year.

SQM Vacancy Rates

Source: SQM Research

It should be noted that seasonality has had a significant part to play in December’s result, with vacancy rates tending to rise at the very end of each calendar year.
 
However, as can be observed from the table above, there has still be considerable increases on a yearly bases with Perth rising by 1.2 percentage points and both Brisbane and Canberra increasing by 0.6 percentage points since the same month in 2012.
 
Notably, Melbourne’s 3.4 per cent vacancy rate for December marks the fifth consecutive increase in vacancies for this capital city. It is now sitting above what SQM Research considers to be market equilibrium, which is 3.0 per cent.

“The elevated vacancy rates are predominantly due to new supply on the market…”

Ongoing uptrends in a number of the capital cities’ CBD locations are now of particular significance. Vacancy rates in Brisbane’s CBD, for example, are currently sitting at 5.4 per cent, Melbourne’s CBD at 5.8 per cent and Perth’s CBD at 5.9 per cent. In all three CBD locations, vacancy rates have surged from mid-2013 onwards.  

The elevated vacancy rates are predominantly due to new supply on the market in these inner city localities and can explain some of the surges in vacancies for these cities.
 
As also previously reported, SQM Research has recorded some extremely high vacancy rates for a number of resources based townships. In particular:

• Karratha – 8.0 per cent
• Port Hedland – 6.3 per cent
• Gladstone – 11.1 per cent
• Mackay – 6.8 per cent
• Townsville – 8.0 per cent

If you would like to see the current vacancy rate for your postcode, click here.

About the Author

SQM Research is an independent property advisory and forecasting research house which specialises in providing accurate property related advice, research and data to financial institutions, property developers and real estate investors. It is founded and run by one of the country's most recognised and respected property analysts, Louis Christopher.

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