In January 2018 there were 15,775 vacant properties in Australia’s most populated city – this number rose to 22,426 in January 2019, which is a 40% increase.
The vacancy rate of Sydney property for January 2019 was 3.2%, up from 2.3% at the same time last year.
In addition to rising vacancy rates, Sydney investors are also feeling the pinch in their rental returns.
House price rents have fallen 1.8% over 12 months, while unit prices fell by 2.8% over the same period according to Domain’s House Price Report for December 2018.
Louis Christopher, managing director of SQM Research, said he expects vacancy rates to rise in Sydney.
“Given that we are just reaching the peak in dwelling completions right now, we expect vacancy rates to rise in Sydney, potentially up to 4 per cent for this year,” Mr Christopher said.
Sydney not the highest vacancy rate
Sydney is not the city with the highest percentage of vacant properties – that honour belongs to Darwin, which boasts a vacancy rate of 3.8%.
The rate for January 2018 was 3.1%, while the actual number of vacancies increased by a mere 18, so the Sydney figure is a bit more statistically significant.
The city with the lowest vacancy rate is Hobart at just 0.5%, while Perth registered the biggest drop from 4.4% to 3.0%.
| City | Jan-2018 Vacancies | Jan-2018 Vacancy Rate | Jan-2019 Vacancies | Jan-2019 Vacancy Rate |
|---|---|---|---|---|
| Adelaide | 2,793 | 1.5% | 2,141 | 1.1% |
| Perth | 8,909 | 4.4% | 6,121 | 3.0% |
| Melbourne | 9,744 | 1.8% | 10,564 | 1.9% |
| Brisbane | 11,505 | 3.6% | 8,911 | 2.7% |
| Canberra | 569 | 0.9% | 594 | 0.9% |
| Sydney | 15,775 | 2.3% | 22,426 | 3.2% |
| Darwin | 941 | 3.1% | 1,193 | 3.8% |
| Hobart | 126 | 0.4% | 144 | 0.5% |
| National | 74,113 | 2.3% | 72,574 | 2.2% |
Source: SQM Research
“It still appears to be a tenants market in Darwin and Sydney where vacancy rates are high at 3.8% and 3.2% respectively,” Mr Christopher said.
“Going forward, we expect another seasonal decline in vacancies for the month of February.
“However for the year our expectation is national vacancy rates will rise at the national level, driven by rises in Sydney.”
SQM’s methodology is based on online rental listings that have been advertised for three weeks or more that are compared to the total number of established rental properties.
For feedback or queries, email will.jolly@savings.com.au
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