Apr 22

People appear to be choosing rent over property purchase

Following is a press release from SQM Research that was released last night. It pretty much says it all…residential vacancies relatively stable month on month and up a tiny bit year on year. Perth appears to be a rental concern with very few vacancies whilst Melbourne has the highest vacancy rate in Australia.

Figures released by SQM Research reveal that the level of residential vacancies remained relatively unchanged during the month of March 2012, increasing on a national level by only 243 vacancies. The national vacancy rate remained at 1.7%, revealing a 0.2% increase year-on-year.

It appears that Australia’s rental market is remaining excessively tight for the time being with no capital cities recording considerable increases month-on-month or recording a vacancy rate of 3% or higher.

With the housing market itself remaining sluggish, it is likely that more and more individuals are choosing the rental market over deciding to purchase property at this time. This continued negative sentiment when it comes to real estate is assumedly putting increased pressure on the nation’s vacancies.

Managing Director of SQM Research, Louis Christopher says, “Perth is now an area of major concern with vacancies now sitting at an incredibly low 0.5%. This is consistent with evidence from other researchers reporting rapidly rising rents.

“Hobart on the other hand is beginning to show signs of the opposite extreme, with vacancies doubling since this time last year and many localities recording vacancy rates above 4%. We are also seeing rising stock levels in this area, which in contrast to other capital cities which seem to suffer from one or the other, reveals that Hobart is being hit with an oversupply issue from both sides.”

SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties. SQM considers this a superior methodology compared to using a potentially incomplete sample of agency surveys or merely relying on raw online listings advertised.

Key Points

  • Nationally, vacancies remained the same during the month of March, recording a vacancy rate of 1.7% and a total of 47, 323 vacancies.
  • Melbourne has recorded the highest vacancy rate of the capital cities- revealing a vacancy rate of 2.9% and a total of 10,738 vacancies.
  • Perth has recorded the tightest vacancy rate of the capital cities at 0.5% – a total of 936 vacancies.
  • Hobart has recorded the highest yearly growth in vacancies, increasing by 1.2% since March 2011 and coming to a total of 678 vacancies.
  •  Darwin has recorded the most extensive yearly falls, decreasing by 1.3% since March 2011 and coming to a total of 142 vacancies.
  • Adelaide, Canberra and Hobart all recorded monthly increases of 0.1%. Aside from this, there were no other increases for capital cities month on month.

Source: SQM Research

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