Rental listings in Sydney and Melbourne are continuing to fall at a time when demand is high due to the increase in migration and local demand. There is a nationwide drop by 4.5 per cent over the last month to 55,124 which is a record low. This is due to more landlords opting to turn their investment properties to short term leasing market instead of renting the properties out. Opting for short term lease is yielding higher income for the landlords as opposed to offering the properties out as long-term rentals.
Rental listings in Sydney slumped by 5.7 per cent to 16,142 over the same period, to their lowest level in more than five years, while Melbourne fell by 3.6 per cent to 14,666 – a three-year low.
More listings are popping up in some regional areas where the rental market have surged during the pandemic.
“While there has been a steady stream of dwelling completions, household formation has also been expanding at a quicker rate than the number of dwellings completed in these cities.
“On top of that, more landlords are opting to lease their property via websites such as Airbnb and Stayz. And that has made the pool of long-term leasing, which is what we measure these vacancy rates, reduce over time.”
Airbnb has about 11,043 listings from Sydney which is comparable to the volume of long-term leasing in the city, according to SQM Research data.
Currently there is 15,500 rental properties in Melbourne on the short-term leasing site while Brisbane has 4730 homes being offered.
The shrinking pool of available rental properties and rising demand from international students and returning workers have fuelled a sharp drop in vacancies across the central business districts, Mr Christopher said.
Rental property vacancies have dropped by 3.4 per cent and fell to 2 per cent in Melbourne and to 2.2 per cent in Brisbane.
During the height of the pandemic, Sydney’s vacancy rate soared to 16.2 per cent, it soared to 10.8 per cent in Melbourne and to 14 per cent in Brisbane.
“With the falls in CBD rental vacancy rates to well below average, we have evidence that the rise in overseas arrivals is starting to put some additional demand pressure in certain pockets of the rental market,” said Mr Christopher.
“We will wait to see if the increased immigration demand creates pressure elsewhere.”
Companies are transitioning from working from home to the office now and therefore the push by employers for workers to return to the office has started to weigh on demand for popular coastal locations that have benefited from the city exodus.
Vacancy rates on the north coast, which includes Byron Bay, have dropped to 0.9 per cent, it rose to 0.6 per cent on the Gold Coast and to 0.8 per cent on the Sunshine Coast.
Rising vacancies are now being reflected in the lower rents being achieved in these areas. Asking rents on the Gold Coast have dropped by 3.6 per cent over the month, it fell by 1.9 per cent on the NSW’s Central Coast and by 1.2 per cent in Byron Bay.
Some locations are seeing a sharp rise in rental prices with Sydney posting a 19.5 rise in asking rents over the past 12 months. Melbourne rose by 17.3 per cent, Brisbane by 20.7 per cent, Perth 12.4 per cent, Adelaide 18.1 per cent and the ACT 9 per cent. Nationally, asking rents jumped by 12.7 per cent.
