Is rental property a good investment? Great news for property investors, vacancy rates have been falling, and rents are rising across most nationwide markets. A new study by SQM Research shows that the national vacancy average is 2.1 percent tighter than the rate of 2.5 percent in December 2019 and slightly lower than the rate of 2.2 percent a year ago.
The figures suggest there is a shortage of homes available for rent in most major markets. In January, all cities reported reductions in vacancy rates, with the exception of Hobart, which remained steady at 0.6%, the lowest of all capital cities.
Adelaide (1%) and Canberra (1.4%) have very tight rental markets, while Perth, Brisbane, and Melbourne all have vacancy rates a little above 2%. Darwin recorded 3.2 percent of the highest vacancy rate, followed by Sydney 3.1 percent.
Managing Director of SQM Research, Louis Christopher said, “Following on from December, January’s vacancy rates are also affected by seasonality. We will have a clear picture of the rental market when the numbers for February are released. However, we do believe that rental vacancy rates have now peaked in Sydney, Brisbane, Perth, and Darwin. And assuming a stable economy, these cities are likely to record gradually lower vacancy rates as 2020 progresses.”
The capital city average for house rents has risen by 1.6 percent over the last 12 months. Rents for both houses and apartments in Sydney, Brisbane, Perth, Adelaide, and Hobart have risen in this period. Rent for both Sydney and Darwin homes and units, however, remains lower than they were a year ago.