Australia’s vacancy rate is holding steady at a record low, creating an ideal market for Landlords. Vacancy rates are a strong indicator of the demand for an investment property, and whether a certain area will likely have difficulty finding tenants.
Vacancy rates in Sydney have reached an all-time low. Landlords are being inundated with applications. Tenants are frequently offering up to a year’s rent in advance. Agents have reported that they are also offering more than the advertised price.
A low vacancy rate is also ideal because there is a potentially greater selection of applicants and quality tenants. There is also an opportunity for increased rental rates and fewer landlords competing for the tenant pool.
Three per cent is a healthy vacancy rate because it’s the point at which the market is evenly balanced between landlords and renters. A low vacancy rate represents high rental demand, while a vacancy rate above four per cent has more properties available than is needed by the interested tenant pool.
City renters looking for ample space and the shortage of rental properties as investors cash in on the property boom are some factors for the low vacancy rates.
According to Domain.com.au’s latest Rental Vacancy Rate Report, recently opened international borders have added pressure on an already fatigued rental market, where the vacancy rate fell from 1.9 per cent in January to 1.7 per cent in February.
Now at 1.4 per cent, Sydney, along with Melbourne, has had the biggest monthly fall in vacancy rates. Other reasons, including far-flung areas and the recent floods, have further magnified landlords’ opportunities in the market.