Australia’s vacancy rate has plummeted for the fifth consecutive month, maintaining 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.
Available rentals in Sydney have almost halved to a record low of 1.3 per cent in July, down from 2.4 per cent in July last year.
Domains Chief of Research Economics reported, ‘the rental market remains firmly in favour of landlords across every capital city, with a shortage in rental supply driving up asking rents and further escalating competition between tenants’.
With each passing month, vacancy rates in Sydney continue to reach record lows. 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.