Vacancy rates: May 2021 home > Uncategorized > Vacancy rates: May 2021

Nationally, the vacancy rate fell in May for the second consecutive month and now sits at 1.7 per cent. 

The last time national vacancy rates were this low was in February 2020, the month before the COVID pandemic caused widespread lockdowns. This is the equal lowest national vacancy rate since Domain records began in 2017. 

Vacancy rates either fell or held stable over the month of May across all of the major capital cities. The majority of cities recorded a tightening vacancy rate, with Sydney, Melbourne, Brisbane, Hobart and Darwin falling over May. While Perth, Canberra and Adelaide held steady over the month.

In Sydney, the vacancy rate has returned to pre-pandemic levels, falling from 2.9 per cent to 2.7 per cent. This is the same as for March 2020, one month before the pandemic induced a bounce in the vacancy rate to 4 per cent. 

Sydney saw a 5 per cent drop in vacant rental listings over the month. Inner-city regions are leading the charge in the tightening rental conditions across the city. The inner city, Canada Bay, Auburn, Ryde-Hunters Hill and Bankstown recorded the largest fall in estimated vacant rental listings.

In Melbourne, vacancy rates are still considerably high, but they have been falling rapidly from the 5.4 per cent peak in December last year. Over the course of the past three months, the vacancy rate has fallen a substantial 0.9 percentage points. This will be a welcome boost for landlords who have struggled to secure a tenant and signals the worst is now behind us.

For the second month in a row, Melbourne’s vacancy rate tightened more than any other capital, declining from 4.2 per cent to 3.8 per cent. There were just under 22,000 estimated vacant rental listings at the end of May, a decline of 10 per cent on the previous month. 

The inner city and suburbs surrounding Monash University’s Clayton and Caulfield campuses had led the charge in the recovery of Melbourne’s vacancy rate. The regions with the most pronounced fall in estimated rental listings in May are Melbourne City, Stonnington-West, Glen Eira, Monash and Port Phillip.

If Victoria’s circuit breaker lockdown extends beyond seven days, vacant rental listings may increase in regions with a high proportion of people working in the hospitality and tourism sectors. Those who have had a significant reduction in hours may be forced to cut costs and move in with family or friends. Vacancy rates are also likely to remain particularly weak in areas with a higher proportion of short-term rentals as ongoing outbreaks affect interstate travel and sentiment towards travelling to Greater Melbourne. 

Vacancy rates continue to remain tight in the smaller capital city rental markets, and this is likely to continue to put increased pressure on asking rents. Canberra and Perth are close to record multi-year lows. Meanwhile, Darwin, Adelaide and Brisbane are at their lowest vacancy rates since Domain records began in 2017.

Article by domain.com.au