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RESIDENTIAL PROPERTY

Darwin bucks national vacancy trend

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RESIDENTIAL vacancy rates reached a historic high in Sydney throughout April, as weak demand pushed up vacancies across the country.

Data from SQM Research showed the national rate increase from 2.1% to 2.3% over the month.

Darwin was the only capital city to see a firming in vacancies over the month, down slightly to 3.6%, but remains the highest of all capital cities since overtaking Perth in September.

Sydney’s rate jumped from 3.1% to 3.4%, representing a record high for Sydney based on SQM’s rental index, which goes back to 2005.

Hobart remains the tightest market, despite a small uplift to 0.6% in April.

“Tenancy demand has been weak over the course of March and April. That, combined with the expectation that dwelling completions are at their peak, prompted the rise in rental vacancies, which happened largely across the country, last month,” managing director of SQM Research, Louis Christopher said.

“Going forward we expect rental vacancy rates will further rise in Sydney and Melbourne for most of 2019, before peaking and falling in 2020 as completions are forecasted to fall.”

Capital city asking rents increased 0.2% for units and declined 0.4% for houses for the week ending 12 May. In annual terms, units declined by 0.7% and houses were steady.

Rents in Sydney were down by 0.3% for units and 1.5% for houses over the one-month period, and are now 3.8% and 5.0% respectively below levels one year ago. Darwin is the only other capital city to see a fall in both markets over the past year, by 8.0% and 7.9%.

All other capitals experienced annual rental increases, led by Hobart (7.4% for houses and 4.0% for units) and Perth (6.1% and 4.0%), although Melbourne, Adelaide, Canberra and Hobart each modest declines in house rents over the month. Small movements were recorded across other markets, while Hobart unit rents increased by 2.3%.

Australian Property Journal