Rents soar as vacancies plummet

Residential rental vacancies fell to their lowest rate in 16 years in March while asking prices for rent around the country saw an average month-on-month rise of 2.4%, according to SQM Research.

“The rental crisis has deepened with rental vacancy rates across the country falling to just 1%,” says SQM Research managing director Louis Christopher.

“As a result, market rents have exploded. Some of our capital cities and regions are recording asking rental increases in excess of 15% over the past 12 months.”

Looking at vacancy rates in the capitals for March, Sydney and Melbourne dropped to 1.6% and 1.9% respectively (from 2% and 2.3% in February).

All other capitals sat well under the 1% rate. Christopher had anticipated at least some relief for tenants in regional areas, as newcomers move back to cities and prices shift down alongside demand. But that is yet to materialise with many locations still recording zero vacancy rates.

He is calling for state and territory governments to provide increased financial assistance to renters to “cushion the rental accommodation emergency we have here and now”.

The Australian Institute of Health and Welfare uses the 30/40 rule to define housing stress. This considers the lowest 40% of income earners to be experiencing financial stress when they spend more than 30% of their take-home pay on housing.

The most recent census shows about a third of Australian households are renting their homes. On average, they dedicate 29.4% of their income to their lease, according to a joint 2021 ANZ CoreLogic report.

Considering rental prices across the nation have increased by 11.9% on average in the 12 months to April – alongside cost of living pressures outstripping wage growth – housing stress may be top of mind for many.