Real estate investors have provided a small ray of hope for Australia’s struggling rental community: after years of persistent shortages, vacancy rates in the extremely tight market fell slightly in June.
REA’s latest PropTrack Market Insight Report shows that the national rental vacancy rate rose 0.09 percent to 1.42 percent in June, with Sydney and Melbourne leading the way.
In Sydney, the rate rose by 0.2 points to 1.68 percent and in Melbourne it increased by 0.12 points to 1.5 percent.
Vacancy rates remain relatively stable in Brisbane, Adelaide, Perth, Hobart and the Australian Capital Territory, with each of these cities seeing an increase of less than 0.1 percent.
Darwin was the only major city to record a decline of 0.41 points to 1.15 percent.
Across all capital cities, the vacancy rate is now at 1.46 percent.
Anne Flaherty, senior economist at PropTrack, attributes the easing to increased investor activity.
“The higher vacancy rates are due to increased investor activity, which in turn contributes to a larger number of available rental properties,” she said.
“Despite the recent easing of vacancy rates, the chronic undersupply of rental apartments is likely to persist in the coming years.
“Construction activity is lagging behind population growth, with the shortage of new housing most severe in WA, Queensland and NSW.
“While vacancies in the capital cities increased over the course of the month, the regional vacancy rate remained relatively stable. The regional vacancy rate is now lower than in the capital cities combined.”
The combined vacancy rate for Australia’s regions is 1.31 percent. It is lowest in South Australia at 1.22 percent.
Since March 2020, the nationwide vacancy rate for rental apartments has fallen by 43 percent.
The decline in available property has been most pronounced in Sydney, Perth and Darwin, with these cities seeing declines of 49 percent, 50 percent and 76 percent respectively over the past four years.
WA, South Australia and Queensland saw declines of 60%, 52% and 48% respectively.
State governments and the federal government are currently struggling to resolve the dramatic imbalance between supply and demand in the housing market, which is causing severe problems for renters and first-time buyers.
South Australia will exempt local authorities from the requirement to obtain planning permission for new homes in planned greenfield zones. This means that developments that meet basic criteria can bypass the regulatory process and go straight to the planning permission and final development approval stages.
The federal government aims to build 1.2 million new homes by 2029.
Queensland Premier Steven Miles also called on the federal government to reduce migration so that states can catch up in housing construction.
“Although our Homes for Queenslanders plan will create more housing, with continued immigration we will need tens of thousands more homes each year than industry can build,” he said on May 14.
“The federal government must support us in keeping the infrastructure up with population growth.”
According to the latest ABS population statistics, net immigration from abroad in 2023 was 547,300 people.