{"id":20808,"date":"2018-04-26T01:00:13","date_gmt":"2018-04-25T15:00:13","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=20808"},"modified":"2018-04-26T01:00:13","modified_gmt":"2018-04-25T15:00:13","slug":"something-isnt-adding-up-with-vacancy-rates","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/something-isnt-adding-up-with-vacancy-rates\/","title":{"rendered":"Something isn\u2019t adding up with vacancy rates!"},"content":{"rendered":"<p><strong><em>By Simon Pressley, Head of Research, Propertyology<\/em><\/strong><br \/>\nThe flood of additional stock added to rental pools from Sydney and Melbourne\u2019s four consecutive years of record high volumes of property investor transactions has not translated into significant increases in vacancy rates as would ordinarily occur.<br \/>\nAnd it\u2019s not unique to Sydney and Melbourne. As part of my daily research, I\u2019m often surprised to see <a href=\"http:\/\/www.propertyology.com.au\/far-north-queensland-outperform-south-east\/\" target=\"_blank\" rel=\"noopener noreferrer\">low vacancy rates in parts of regional Australia<\/a> where economies have been much softer than Sydney and Melbourne post-GFC.<br \/>\nSomething isn\u2019t adding up with Australia\u2019s residential vacancy rates!<br \/>\nPropertyology believes that the emergence of Airbnb as an alternative short-stay accommodation option is having a significant influence on the supply of property to long-term tenants.<br \/>\nIt\u2019s not a coincidence that the common denominator among locations with an out-of-cycle tightening of vacancy rates is tourism popularity \u2013 it\u2019s the Airbnb affect!<br \/>\nInvestor transaction volumes in Sydney and Melbourne between 2014 and 2017 were three times higher than normal.<br \/>\nAs of 1 July 2017, both New South Wales and Victoria introduced more attractive incentives that have already resulted in increased first homebuyer activity \u2013 thereby easing demand for rental accommodation.<br \/>\nBut the huge spike in rental supply and easing rental demand has resulted in Sydney vacancy rates only mildly increasing over the past couple of years (1.7 in January 2016 to 2.3 per cent in January 2018).<br \/>\nAnd Melbourne vacancy rates have completely defied logic, tightening from 2.4 to 1.8 per cent over the same two-year period.<br \/>\nThere\u2019s another force at play \u2013 it is the likes of Airbnb and Stayz.<br \/>\nInstead of adding investment properties to the traditional (long-term) rental pool for local residents, an increasing number of investors are putting their properties up for rent for short-term visitors such as tourists and business travellers.<br \/>\nAccording to Airbnb, listing volumes in Australia rose by 40 per cent in the year to November 2017, with some 120,000 properties now available on the accommodation platform.<br \/>\nAirlie Beach, the gateway to Queensland\u2019s Whitsunday Islands, has seen vacancy rates plummet from 7.5 to 1.5 per cent over the two years ending January 2018.<br \/>\nOther popular tourism destinations also to experience a significant rental tightening include Mooloolaba on the Sunshine Coast (2.1 to 1.1 per cent), Hervey Bay (3.2 to 2.8 per cent), Cairns (2.3 per cent to 1.8 per cent), Orange in New South Wales (2.7 to 1.7 per cent), and Torquay in Victoria (2.5 to 1.3 per cent).<br \/>\nThroughout Tasmania, where domestic and international tourists just can\u2019t get enough of their unique tourism experiences, vacancy rates are so tight that the University of Tasmania has committed resources to an extensive study on the impact of Airbnb.<br \/>\nVacancy rates continue to tighten in <a href=\"http:\/\/www.propertyology.com.au\/our-services\/\" target=\"_blank\" rel=\"noopener noreferrer\">several locations across Australia that our buyer\u2019s agents are currently active in<\/a>.<br \/>\n<img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2018\/04\/2018-Your-Results-KarlDurat.jpg?w=1060&#038;ssl=1\" \/><br \/>\nWhile the short-stay accommodation model has been a significant disruptor for hotels and other more traditional leisure and business accommodation businesses, the bigger picture is that it\u2019s been very good for consumers and the broader economy.<br \/>\nAccording to Airbnb, nearly five million Australians now use the service, which can range from an overnight stay in an apartment&#8217;s spare bedroom or a few weeks in an entire empty house.<br \/>\nIn Hobart, Australia\u2019s strongest property market since mid-2016 (by a long streak), short-stay popularity has contributed towards rents skyrocketing.<br \/>\nA number of <a href=\"http:\/\/www.propertyology.com.au\/multiple-investment-properties-500-month-2\/\" target=\"_blank\" rel=\"noopener noreferrer\">clients that Propertyology helped invest in Hobart prior to the boom<\/a> commencing have reported that their rental income has increased by as much as 25 per cent in the past 12 months alone.<br \/>\nHobart vacancy rates of 0.4 per cent is an all-time Australian capital city record low.<br \/>\nMelbourne, with a year-round calendar of major events, is estimated to have 12,000-plus properties listed for rent on Airbnb. No wonder its vacancy rate has produced a total out-of-cycle decline.<br \/>\nIt is worth noting however, that the impact of the Victorian government\u2019s vacancy tax, effective 1 January 2018, is yet to materialise.<br \/>\nOther big cities around the world such as New York, Paris, London, Rome and Amsterdam have also reported a significant reduction in the size of their long-term rental pool for local residents.<br \/>\nWhen selecting an asset to invest in, there are a number of more important considerations than short-stay rental potential.<br \/>\nHowever, the broader impact that this innovative business model is having on markets has more positives than negatives if you ask me.<br \/>\nIf you\u2019d like to know more about Propertyology\u2019s services, here\u2019s how you <a href=\"http:\/\/www.propertyology.com.au\/contact-us\/\" target=\"_blank\" rel=\"noopener noreferrer\">contact<\/a> them.<br \/>\n<strong><a href=\"https:\/\/www.propertyology.com.au\/contact-us\/\" target=\"_blank\" rel=\"noopener noreferrer\">Propertyology<\/a> is a national property market researcher and buyer\u2019s agency. The multi-award-winning firm\u2019s success includes 2018 REIQ Buyer\u2019s Agency of the Year and being a finalist in the 2017 Telstra Business Awards. Managing Director Simon Pressley is a REIA Hall Of Fame Inductee and a three-time winner of the REIA and REIQ Buyers Agent of the Year award.<\/strong><br \/>\n&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"110\"><strong>\u00a0<\/strong><\/td>\n<td colspan=\"2\" width=\"165\"><strong>Vacancy Rate<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"110\"><strong>\u00a0<\/strong><\/td>\n<td width=\"82\"><strong>Jan 2016<\/strong><\/td>\n<td width=\"82\"><strong>Jan 2018<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Sydney<\/td>\n<td width=\"82\">1.7%<\/td>\n<td width=\"82\">2.3%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Melbourne<\/td>\n<td width=\"82\">2.4%<\/td>\n<td width=\"82\">1.8%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Brisbane<\/td>\n<td width=\"82\">2.9%<\/td>\n<td width=\"82\">3.6%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Adelaide<\/td>\n<td width=\"82\">2.0%<\/td>\n<td width=\"82\">1.5%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Perth<\/td>\n<td width=\"82\">4.2%<\/td>\n<td width=\"82\">4.4%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Hobart<\/td>\n<td width=\"82\">0.9%<\/td>\n<td width=\"82\">0.4%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Canberra<\/td>\n<td width=\"82\">1.5%<\/td>\n<td width=\"82\">0.9%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Greater-Darwin<\/td>\n<td width=\"82\">3.9%<\/td>\n<td width=\"82\">3.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Cairns<br \/>\nQld<\/td>\n<td width=\"82\">2.3%<\/td>\n<td width=\"82\">1.8%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Airlie Beach<br \/>\nQld<\/td>\n<td width=\"82\">7.5%<\/td>\n<td width=\"82\">1.5%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Hervey Bay<br \/>\nQld<\/td>\n<td width=\"82\">3.2%<\/td>\n<td width=\"82\">2.8%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Noosa<br \/>\nQld<\/td>\n<td width=\"82\">1.7%<\/td>\n<td width=\"82\">2.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Mooloolaba<br \/>\nQld<\/td>\n<td width=\"82\">2.1%<\/td>\n<td width=\"82\">1.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Coolangatta<br \/>\nQld<\/td>\n<td width=\"82\">0.4%<\/td>\n<td width=\"82\">0.4%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Byron Bay<br \/>\nNSW<\/td>\n<td width=\"82\">1.0%<\/td>\n<td width=\"82\">1.5%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Port Macquarie<br \/>\nNSW<\/td>\n<td width=\"82\">1.7%<\/td>\n<td width=\"82\">1.7%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Coffs Harbour<br \/>\nNSW<\/td>\n<td width=\"82\">1.0%<\/td>\n<td width=\"82\">1.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Bondi Beach<br \/>\nNSW<\/td>\n<td width=\"82\">1.8%<\/td>\n<td width=\"82\">2.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Orange<br \/>\nNSW<\/td>\n<td width=\"82\">2.7%<\/td>\n<td width=\"82\">1.7%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Torquay<br \/>\nVic<\/td>\n<td width=\"82\">2.5%<\/td>\n<td width=\"82\">1.3%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Port Melbourne<br \/>\nVic<\/td>\n<td width=\"82\">1.5%<\/td>\n<td width=\"82\">1.6%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Burnie<br \/>\nTas<\/td>\n<td width=\"82\">3.3%<\/td>\n<td width=\"82\">1.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Launceston<br \/>\nTas<\/td>\n<td width=\"82\">2.9%<\/td>\n<td width=\"82\">2.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Broome<br \/>\nWA<\/td>\n<td width=\"82\">4.0%<\/td>\n<td width=\"82\">3.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Busselton<br \/>\nWA<\/td>\n<td width=\"82\">1.8%<\/td>\n<td width=\"82\">1.9%<\/td>\n<\/tr>\n<tr>\n<td width=\"110\">Margaret River<br \/>\nWA<\/td>\n<td width=\"82\">0.4%<\/td>\n<td width=\"82\">0.7%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Simon Pressley, Head of Research, Propertyology The flood of additional stock added to rental pools from Sydney and Melbourne\u2019s four consecutive years of record high volumes of property investor transactions has not translated into significant increases in vacancy rates as would ordinarily occur. And&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":20809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13,20,25],"tags":[70],"class_list":["post-20808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-story","category-propertyology","category-sponsored-channels","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Something isn\u2019t adding up with vacancy rates! - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/something-isnt-adding-up-with-vacancy-rates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Something isn\u2019t adding up with vacancy rates! - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"By Simon Pressley, Head of Research, Propertyology The flood of additional stock added to rental pools from Sydney and Melbourne\u2019s four consecutive years of record high volumes of property investor transactions has not translated into significant increases in vacancy rates as would ordinarily occur. 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