Vacancy rates under 1.5% now common all over Australia: Hotspotting's Terry Ryder
Foreword: The team at Choice Homes have enjoyed the insights and content generated by our friends over at the Property Observer for years! Here's an insightful piece on the current state of the rental market of Australia (well worth a read)...
Markets will little or nothing available for rent have become one of the most compelling stories in Australian real estate.
Vacancy rates under 1.5% are now common all over Australia and property managers with a new rental listing are finding dozens of candidates showing up to compete for the property.
Every day I’m having conversations with real estate professionals of various types – buyers agents, valuers, selling agents, property managers and developers, as well as everyday consumers – and I’m hearing the same stories from locations in every state and territory. There’s little or nothing available for rent and it’s putting serious upward pressure on rents.
Scott Mitchell runs Mitchells Realty in Queensland’s Hervey Bay. It’s a pretty good place to have a real estate agency at the moment because Hervey Bay is a good fit with one of the nation’s biggest trends – the Exodus to Affordable Lifestyle.
You can buy houses for around $300,000-350,000 and walk to the beach, where you’re looking across at stunning Fraser Island. Or, if you’re an investor, you can get rental returns on houses in the 5.5% to 6% range.
Right now the region’s vacancy rate is about 1%. Mitchell says a local property manager recently offered a place to rent and over 40 people showed up to compete for the tenancy. “They were queued up at the front of the house and I’ve never seen that in Hervey Bay before,” Mitchell says.
I’m hearing stories like that from professionals and investors around Australia. And this anecdotal evidence is supported by the data on vacancies and rents.
In the growth city of Gympie, just up the road from the Sunshine Coast, the vacancy rate is 0.6%.
In Bendigo in Victoria, most postcodes have vacancy rates below 0.5% (and most suburbs have had median house price growth between 8% and 15% in the past 12 months). It’s a similar story in Ballarat.
In Albury-Wodonga at the NSW-Victoria border, all of the local postcodes have vacancies under 1%, including two which are just 0.2% and one where vacancies are listed as zero.
Orange west of Sydney has a vacancy rate of 0.4%.
In Adelaide, the overall vacancy rate is below 1% and that’s common right across the South Australian capital. It’s similar across metropolitan Perth and in Hobart, Darwin and Canberra.
Hobart’s vacancy rate has been below 1% for years and is currently 0.7%.
Where are the investors? Mostly they’re sitting at home reading about how high the vacancies are in the Sydney and Melbourne CBDs and how rents are plummeting (to use a word beloved by journalists) in the two biggest cities. And being spooked by that and other media misinformation.
Your average punter isn’t well-informed and is essentially a herd animal. He or she thinks reading big city newspapers is research, when in reality it’s the antithesis of research – it’s the gathering of myths and misinformation and the absorption of negative vibes from journalists for whom the glass is always half empty or completely empty.
There are exceptions, of course, and investors with their radar attuned to opportunity are out there busily competing with first-home buyers and other owner-occupier consumers in places like Adelaide, Perth, Canberra, Brisbane
and dozens of strong regional markets across the nation.
TERRY RYDER is the founder of hotspotting.com.au