According to the latest market report from SQM Research, the Australian rental market is expected to report high vacancies in the coming months, given limited demand and increased registrations.
Louis Christopher, managing director of SWM Research, said vacancies are expected to peak in the short term, even with the slight decline in May.
"With 170,000 housing units planned for this year and still no imminent opening of the international border, I still think that housing vacancy rates will remain high for 2020", did he says.
Some of the market indicators seem to contradict Christopher's claims. In fact, weekly rental listings started to drop in the first week of June, suggesting that vacant accommodation should drop.
"I think what's going on here is that the owners of Airbnb have pulled off the list long term and are now waiting this time in the hope that the borders will be open shortly, "said Christopher.
Christopher said it is crucial to understand, however, that while more than one housing subsidy could help absorb some of the new supply, much of the underlying demand growth in In recent years ultimately comes from net migration.
Read also: The happiest house sellers in Australia
On a monthly basis, the national vacancy rate dropped slightly, from 2.6% in April to 2.5% in May. However, the last vacancy rate was over 2.2% last year.
Two of the largest markets, Sydney and Melbourne, reported rising vacancy rates in monthly and annual terms. Sydney had the highest vacancy rate among all capitals, at 4%, followed by Melbourne at 3.1%.
Zoom on the Sydney CBD, the proportion of vacant housing was more pronounced at 16.2%, a substantial jump compared to 8.1% last year. The Brisbane CBD also recorded a significant increase in the vacancy rate from 4.5% last year to 13.3%.
The table below shows vacancy rates across Australia:
SQM Research has also shown mixed results in capital cities in terms of rental demand. For the week ending June 12, rents charged increased 0.2% for homes but decreased 0.7% for units.
Sydney and Melbourne reported weekly rent declines for both types of housing, while Brisbane, Perth and Darwin recorded increases.
The table below shows the weekly rents requested for the houses and units in each capital:
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