Vacancy rates ease in December

After a tough year for renters, there are some early signs that relief might be on the way with vacancy rates rising in December.

According to PropTrack, national rental vacancy rates rose slightly last month, up 0.05 percentage points to 1.12 per cent.

However, they remain lower compared to the same time last year.

Sydney saw the second-greatest increase of the capital cities in December, climbing 0.09 percentage points to 1.37 per cent, but vacancies fell throughout the year.

Melbourne’s rental vacancy rate was largely unchanged over December, rising 0.01 percentage points to 1.18 per cent, after declining through the year.

Brisbane’s rental market is extremely tight with vacancies holding below 1 per cent after rising a small 0.02 ppt in December.

PropTrack Senior Economist, Eleanor Creagh said although vacancy rates eased in most markets in December, rental markets remain tight, and stock is extremely limited. 

“Low rental vacancy rates are indicative of tight rental markets, with tenants competing for limited stock,” Ms Creagh said.

“These conditions made it difficult for many to find an available rental property and drove strong price growth throughout 2023. 

“Many tenants are likely to be spending an increasing portion of their income on rent, placing pressure on household budgets.”

Conditions for renters continue to be tough in Adelaide and Perth, with vacancy rates holding below 0.75 per cent, indicating the lack of stock is at critical levels. 

Throughout 2023, conditions eased very slightly, with vacancies increasing 0.02 and 0.06 percentage points, respectively. 

Vacancy rates also eased 0.06 percentage points in regional areas in December, though have fallen 0.07 percentage points throughout the year amid tough market conditions.

Ms Creagh said despite the tight conditions it appears vacancy rates are improving compared to last year.

“With the number of vacant properties remaining at low levels, tenants will continue to face challenging conditions,” she said.

“However, conditions in the rental market are unlikely to deteriorate at the same pace as they did in 2022 and 2023, meaning rental prices could stabilise and increase at a slower rate than the past year.”

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