Capital city asking rents jump 9.4% over year to March
SQM Research today has revealed national residential property rental vacancy rates fell to 1.2% in February 2022, a fresh 16-year low and down from 1.3% in January 2022. Available rental properties plunged in the Melbourne and Sydney CBDs while capital city asking rents have 9.4% over the year to March 12, which is likely to add fuel to inflation.
The total number of vacancies Australia-wide now stands at 43,844 residential properties, down from 47,977 in January. Sydney, Melbourne and Brisbane vacancy rates fell to 2.0%, 2.3% and 0.9%, respectively, down from 2.1%, 2.7% and 1.1% in January. In the smaller capital cities, Perth, Adelaide, Canberra, Darwin and Hobart, vacancy rates sat well below 1.0%.
Vacancy rates plunged in the Melbourne CBD to 2.8% from 4.0% and fell in the Sydney CBD to 4.3% from 4.5%. SQM Research forecasts further falls in CBD rental vacancy rates as international borders reopen and a part return to ‘working from the office’.
Over the month to 12 March 2022, capital city average asking rents rose 0.5% for houses and 0.4% for units, with asking rents for houses at $627 per week and $447 for units, respectively. Perth, Brisbane and Canberra recorded the biggest increase in house asking rents over the month, while Melbourne and Sydney house rents were steady. Over the year, capital city asking rents surged by 9.4% on a combined dwelling basis. Rents rose by 14.0% for houses and 8.5% for units.
Louis Christopher, Managing Director of SQM Research said: “Given a dramatic tightening in vacancy rates, we are seeing an ongoing acceleration in weekly market rents across the capital cities. This situation now represents a significant rental crisis across the country. The flooding may exacerbate the shortage of rental accommodation in NSW and Queensland in coming weeks. And the new surge in international students and other overseas arrivals will continue to create shortages in our inner-city regions.
“Overall, it is likely vacancy rates will fall again over March as the first week recorded yet another decline in rental accommodation listings. Some slight relief may be at hand as the current seasonal tightening we have seen at this time of year generally comes to an end over April.
“All the same, we can expect capital city rents to rise by over 10% in 2022. As it stands, the current rent rises represent the largest increase since the 1970s and so there are major near terms ramifications for inflation. Housing is the highest weighted group in the CPI, accounting for around 23% of the basket,” said Christopher.