Nationally, the rental vacancy rate held steady in September, marking the fifth consecutive month vacancy rates have stayed at 1.7 per cent according to Domain’s latest rental vacancy report.
This consistency is uncharted territory for the rental market, proving to be the longest period of stability tenants have had since the vacancy rate series began in 2017 according to Dr. Nicola Powell, Domain’s senior research analyst.
While there was no change over the month nationally, there was a mixed movement across the capital cities with most recording a drop in the number of vacant rentals.
Melbourne tenants firmly have the power to negotiate rent in certain areas, however, the continued drop in vacancy rate is a timely reminder that rental conditions favouring tenants might not be here to stay.
Tenants will be operating in a landlords’ market across all capitals, apart from Sydney and Melbourne.
This could continue to place upwards pressure on rents.
What about the lockdowns?
Lockdowns have continued into September, with Melbourne, Sydney, and Canberra feeling the brunt of higher COVID-19 case numbers.
However, while case numbers are on the rise, vacancy rate movement remains mixed across the three locked-down cities.
Dr. Powell explained:
Tenants who have realised a significant dip in income will welcome recent state government support introduced recently in Victoria, New South Wales and Canberra.
This is likely to have helped to keep vacancy rates steady in Sydney, reducing a shift in tenants to cheaper rentals or alternative accommodation.
While these measures support the demand side of the rental market, landlords may be enticed to switch rental listings into sale listings, especially in a booming property market where rental yields remain weak and capital gains are strong.
Of course, we discourage them from doing this, as most are considering selling for the wrong reason.
We like to remind them why they first invested in property it wasn’t to sell when the market prices keep your investments in the long-term to allow them to have financial freedom.
With properties going up in value by up to $1,000 a day in some states, it makes little sense to sell at the moment.
The property won’t care who owns it in the future.
Why shouldn’t it be you who benefits from the capital growth that will occur over the next years?
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