Why's Australia's rental vacancy rate at a decade low?
Updated: May 18, 2022
The Australian rental market has tightened quite considerably over the last 6 months, leading to a vacancy rate that hasn't been seen in 10 years. The national vacancy rate now stands at 1.7%, down from 1.8% in May. This staggering figure has created momentum with property experts calling forward real estate investors to cash in on great returns and capital growth potential.
The data was released by one of Australia's most respectable and recognised investment researchers - SQM Research. SQM reported the cities experiencing significant reductions in vacancies from May to June. They were; Sydney, Melbourne, Hobart and Adelaide. The other capital cities remained relatively stable for that month. However, over a 12-month basis, most cities experienced a significant reduction to their vacancy rate due to the high volume of demand for rental properties.
What's made buying an investment property desirable?
Various factors have contributed to the demand for investment properties. Though, the most reasonable answer to this questions appears to be the mass intestate migration and surge in tenants seeking living arrangements outside of the cities. More Australian's are opting to live in rural locations.
The effect of the pandemic and lockdown measures in various Australian states has also resulted in people wanting to move into other states. A prime example was experienced within the Queensland rental market, earlier this year, as Australian's moved up from southern states.
Real estate investors receiving higher rents from their rental properties
If you're looking at buying an investment property or you own an investment property, you may have noticed the increase to rental asking prices. As the demand for property increases, real estate investors have started to see higher rental returns.
Throughout May to July 2021, SQM Research stated, "capital city asking rents rose 1.8% for houses to $575 per week and rose 1.7% for units to $419." In the last 12 months, asking prices in Brisbane grew by 10.4%, 13.7% for Perth and 16.4% for Canberra. The year-on-year average national asking price experienced a 15.1% uplift. Making it a desirable market for those looking at buying an investment property.
What does this mean for people buying an investment property?
Combined; the low interest and vacancy rates are providing property owners the perfect opportunity to free up their equity. REIF are constantly working to provide smarter and valuable solutions to our clients and potential property investors!
Freeing up your equity to fund an investment property provides as an effective means to reach financial goals sooner. It allows you to establish an investment strategy without having to sell property. Furthermore, growing a sustainable portfolio. This can put you in the perfect position create wealth and build financial independence. That's why we love equity here at REIF!
If you're interested in buying property for investment purposes, now is the perfect time to do so! With access to one of the biggest data bases of full turn key properties across Australia; REIF would love to help! From mapping out your investment strategy, financing and sourcing your perfect property; we provide an end-to-end service that allows you to build wealth for your financial future. Reach out on the details below.
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