Vacancy rates across NSW and Queensland dropped in September, signalling a growing rental crisis.
In Sydney, the vacancy rate fell by 0.4 per cent in September, to be just 1.4 per cent.
Real Estate Institute of NSW (REINSW) Chief Executive Officer Tim McKibbin said most areas across the rest of the state followed the capital’s lead.
“Vacancy rates across the majority of metropolitan and regional areas of New South Wales have dropped, showing that the rental crisis is deepening,” Mr McKibbin said.
“The rate for each of Sydney’s Inner, Middle and Outer Rings fell to 1.7 per cent ( down 0.4 per cent), 1.2 per cent (down 0.3 per cent) and 1.3 per cent (down 1.4 per cent) respectively.
“This is the lowest vacancy rate we’ve experienced for Sydney overall for several months.”
The vacancy rates in the Hunter and Illawarra regions also dipped.
“In the Hunter region, the vacancy rate decreased by 0.2 per cent to be 1.9 per cent,” Mr McKibbin said.
“The Illawarra region also fell, now sitting at 1.8 per cent (down 0.5 per cent).”
Mirroring Sydney and the major regional metropolitan hubs, vacancy rates dropped across most regional areas fell too.
The Northern Rivers region had the largest fall in vacancy rates, decreasing from 2.7 per cent to 1.4 per cent.
“Vacancy rates for the Albury, Central Coast, Central West, Coffs Harbour, Mid-North Coast, Murrumbidgee, Northern Rivers, Orana and South East areas all dropped,” Mr McKibbin said.
“Only the New England, Riverina and South Coast areas recorded increases.”
Mr McKibbin said that the data once again showed the state was in the midst of an extreme rental crisis, the likes of which we’ve not experienced in decades.
“There is simply not enough housing to cope with demand and this is putting tremendous pressure on the rental market,” he said.
“Cost of living pressures continue to mount for tenants and landlords alike.
“Many tenants are staying put, despite rent increases and spiralling costs, for fear they will not be able to secure another suitable property.
“And, following on from 12 interest rate rises since May 2022, more and more landlords are being forced to significantly increase rents.
“Alternatively, they’re choosing to sell their investment properties, which are then being scooped up by home buyers, further reducing rental stock.”
Meanwhile, the Real Estate Institute of Queensland’s (REIQ) Residential Vacancy Rate Report for the September quarter shows that while rates remain at a tight 1 per cent, in most areas vacancy rates have not dipped enough to erase the gains made over the past two quarters.
Of the 50 Queensland regions, 32 tightened, 11 held steady, and only seven relaxed this quarter, however most markets that tightened only did so by a minor 0.1 – 0.2 per cent.
REIQ CEO Antonia Mercorella said while tenants were starting to see a few more ‘for lease’ signs, stock was still snapped up swiftly.
“Over the September 2023 quarter, we can see that we’re still in a situation where there simply isn’t enough rental supply or choice for tenants,” Ms Mercorella said.
“Given these competitive conditions, there’s less turnover of tenants with the median length of tenancies growing to 22 months for houses, and 17.4 months for units.
“While more rentals are becoming available, they aren’t lasting on the market for long.
“Even our less densely populated areas are experiencing the squeeze – in some regional markets, rental listings are an extremely rare commodity as evidenced by a shocking zero-vacancy rate in Cook Shire this quarter.
“Despite these slim pickings, it’s important to note that for the most part, conditions have not dramatically changed this quarter, and generally renters actually have more choice now than they had a year ago.”
Almost all corners of Queensland, from the top to the bottom, experienced tight conditions, with Cook Shire, at the northern tip of Queensland, hitting a rock bottom vacancy rate of zero.
Things aren’t much better along the NSW border, with the Goondiwindi Region recording a vacancy rate of 0.1 per cent.
Charters Towers (0.2 per cent), Southern Downs (0.3 per cent), Banana (0.3 per cent), Maranoa (0.4 per cent), South Burnett (0.4 per cent), Tablelands (0.4 per cent), Maryborough (0.4 per cent), and Mareeba (0.5 per cent) showed a similar ‘squeezed’ state of affairs, with barely any new rental opportunities in the quarter.
In the regional centres: Rockhampton (0.9 per cent) and Livingstone (1 per cent) held steady, while Mackay (0.5 per cent) and Toowoomba (0.6 per cent) both experienced a marginal dip.