The national rental vacancy rate rose to 1.42% in June 2024, up from a record low of 1.09% in February, according to data from PropTrack. This was the fourth consecutive monthly increase, with vacancies rising as more property investors enter the market, boosting the number of available rental properties.
While the increase is welcome news for renters, conditions remain very competitive, with 43% fewer vacant properties compared to March 2020 before the pandemic. The vacancy rate is still well below the 3% level considered a healthy balance between rental supply and demand.
Vacancy Rates by City
Across the capital cities, the vacancy rate increased to 1.46% in June, up 0.11 percentage points over the month. Sydney and Melbourne saw the largest increases, reaching 1.68% and 1.50% respectively, the highest levels in over a year for both cities.
- Sydney's vacancy rate rose 0.2 percentage points to 1.68%, the highest in 18 months, despite rents being 8.8% higher than a year ago.
- Melbourne's vacancy rate reached 1.5% after a 0.12 percentage point increase, the highest in a year, with rents up 10.6% annually.
- Brisbane recorded a 0.05 percentage point increase to 1.2%.
- Canberra had the highest capital city vacancy rate at 1.81% after a 0.04 percentage point rise, with rents steady over the past year.
- Perth saw the largest annual increase, rising 0.27 percentage points to 1.25%, driven by a surge in investor activity in Western Australia.
Rental Market Conditions
While the recent increases provide some relief for renters, the national vacancy rate remains very low at 1.42%. Rental demand continues to outpace supply in most markets, keeping upward pressure on rents.
"Despite the increase seen in recent months, vacancy remains well below pre-pandemic levels, with 43% fewer vacant properties in June compared to March 2020," said PropTrack senior economist Anne Flaherty.
The influx of investors, particularly in Western Australia where investor lending surged 74% over the year to May 2024, has helped boost rental supply. However, more properties are needed to achieve a healthier balance in the market.
While conditions are improving slightly, renters are still facing very tight competition for available properties in most parts of Australia. The increases in vacancy rates provide some hope that the market may be turning a corner, but it will likely take some time before rental conditions return to a more balanced state.
