If you’re a landlord, a renter, or you’re thinking of investing in residential property, knowing the vacancy rates in your city can be an invaluable asset. So which cities are in highest demand, and where do renters have the upper hand?
Across the country, 2.2% of all available rental properties were untenanted in May 2017, according to data from SQM Research. In Sydney and Melbourne, sky-high house prices have helped push rents up, and demand remains strong as first home buyers are forced to rent long-term while they struggle to save that elusive deposit. By contrast, the decline of the mining boom has seen vacancies soar across Perth.
Here’s a snapshot of rental vacancy trends to give you an idea of which are the best cities for renters:
In Melbourne, the median rent in May 2017 was $420, and vacancies sat at 2.2%, a slight drop of just 0.1% from the previous month. The CBD area recently recorded its lowest vacancy rate in almost 10 years, with just 1.7% of properties untenanted. This is despite speculation that apartment over-supply would lead to a cooling in the rental market. In Hawthorn in the inner east, a three-bedroom home will set you back around $700 per week in rent. Meanwhile the same home in the western suburb of Sunshine rents for just $345 per week. However, Sunshine has a vacancy rate of 2.2%, compared to Hawthorn’s 1.3% percent – this is most likely owing to Hawthorn’s proximity to the CBD and leading universities, making it popular with students and young professionals.
In beachside Manly, a two-bed dwelling could cost as much as $960 per week to rent, and the 2.6% vacancy rate is higher than the Sydney average of 1.8%. Yet in Mount Druitt in Sydney’s West, landlords can expect to charge just $350 per week for a two-bedroom home. While rents here are low compared to the Sydney median, a vacancy rate of just 1.2% means your property is unlikely to be empty for long between tenants.
Prospective tenants looking to rent in upmarket Ascot can expect to pay up to $1000 per week for a four-bedroom home. However, with a vacancy rate of 8.7%, the suburb is not so sought after with investors. If you head south to Logan Central, you can snap up a four-bedroom family home for under $400 per week, with vacancies sitting at just 2.2%.
The rental market in Hobart is the strongest in the country, with just 0.6% of properties vacant in May this year. Median weekly rents for three-bedroom homes in Hobart hover around the $360 per week mark, providing healthy yields and making the city an attractive option for both local and interstate investors. A four-bed property in Sandy Bay, close to Tasmania’s world-class university, can command upwards of $600 per week – and with just 0.5% of properties vacant, it seems students and families can’t resist. North of the CBD, a similar property in Glenorchy can fetch $390 per week, and with a vacancy rate of just 0.4% it makes it a suburb which should be on the savvy investor’s radar.
The rental market in Adelaide is holding steady, with 1.9% of homes across the City of Churches vacant in January this year. Leafy Malvern in Adelaide’s inner south, where the median rent is $495 per week, recorded a vacancy rate of 2.7% in May 2017. To the north in Elizabeth, median rents sit at just $268 per week, with a mere 0.9% of properties vacant.
As the mining boom draws to a close, property values across Perth have slumped, and vacancy rates are on the increase. The Perth metro area has the highest vacancy rate of the major capitals, with 4.7% of rentals across the city sitting unoccupied. In riverside Mount Pleasant, $330 a week is the average rent for a two-bed home, and there shouldn’t be too much competition with other prospective tenants as 4.8% of properties are currently vacant. Meanwhile in Midland, vacancies remain around 5.4% despite affordable rents to the tune of $280 for 2 bedroom dwellings.