RESIDENTIAL PROPERTY

Record high residential vacancies

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RESIDENTIAL vacancies in the Melbourne CBD reached an all-time high of 10% in August as the city reeled from a second wave of coronavirus restrictions.

New data from SQM Research showed some CBD locations recorded vacancy rate declines over the month, with Sydney CBD dropping to 12.9%, now down from its own all-time high of 16.2% in May, while Brisbane CBD’s vacancy rate is now 11.4%, below its peak of 14.0% in June.

National residential rental vacancies decreased over the month from 2.1% in July to 2.0% in August. This time last year, the national vacancy rate was slightly higher at 2.2%.

All capital cities recorded declines in vacancy rates over the month except for Melbourne, which increased from 3.1% in July to 3.4%. The stage four lockdown has added an extra 2,145 vacant properties across the city.

Sydney firmed slightly but still has the highest vacancy rate in the nation, of 3.5%. Hobart’s 0.7% vacancy rate is the lowest in the nation, with Canberra and Adelaide also recording low rates of 0.8% and 0.9% respectively.

City August 2019 Vacancies August 2019
Vacancy Rate
July 2020
Vacancies
July 2020
Vacancy Rate
August 2020
Vacancies
August 2020
Vacancy Rate
Sydney 24,465 3.4% 26,506 3.6% 25,828 3.5%
Melbourne 11,830 2.0% 18,746 3.1% 20,891 3.4%
Brisbane 8,283 2.5% 7,593 2.2% 7,154 2.1%
Perth 6,004 2.9% 2,803 1.3% 2,294 1.1%
Adelaide 1,857 1.0% 1,809 0.9% 1,699 0.9%
Canberra 781 1.2% 653 1.0% 569 0.8%
Darwin 926 2.9% 453 1.4% 349 1.1%
Hobart 170 0.6% 212 0.7% 205 0.7%
National 75,741 2.2% 71,760 2.1% 69,971 2.0%

Louis Christopher, managing director of SQM Research, said, “The shift towards regional living continues at pace, largely at the expense of higher inner city rental vacancy rates”.

Melbourne’s CBD vacancies grew from 8.8% in July to one in ten. Adelaide CBD also increased from 7.6% in July to 8.4%, and Perth CBD was stable, at 5.5%.

“I suspect there will have to be a high point in this move soon. However, I also suspect there will be a degree of permanency with the massive population shift. Meanwhile Sydney and Melbourne rents continue to fall providing leasing opportunities for tenants who have chosen to stay in town,” Christopher said.

Most regional locations recorded falls in vacancies. Sydney’s Blue Mountains and Victoria’s Mornington Peninsula both fell to record lows of 0.7%, Queensland’s Ipswich tightened to 0.9%.

Over the month to 12th September, declines in both house and unit rents were seen across capital cities, except for Perth and Darwin. Darwin recorded the highest rental increases in the country, up 6.0% for house rents and 1.0% for units.

Hobart recorded the highest decline in unit rents, of 4.3%, while Sydney was down 1.5%. Other cities saw modest movement.

Sydney recorded the highest decline in house rents over the month of 1.7%.

Adelaide recorded a 0.4% increase in house rents but a 0.4% decline in unit rents.

Sydney, Melbourne, Brisbane and Hobart recorded annual declines in asking rents for both houses and units. Sydney posted an 8.0% decline for houses and 8.1% drop for units. Melbourne unit rents slumped 6.0% and Hobart unit rents by 10.2%, while both posted modest falls in house rents.

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