Macrobusiness

Renting in Australia: Some signs of health

SQM has. published new data on the level is vacancies in the rental markets across Australia.

http://www.sqmresearch.com.au/graph_vacancy.php?region=nsw%3A%3ASydney&type=c&t=q

Signs of improvement in Sydney (2.6%) and Brisbane (3.8%) but still tight as ever in Melbourne, Hobart, Adelaide and Canberra.

Perth (4.6%) and Darwin (3.5%) are the only markets showing real health with a reasonable level of residential vacancies over an extended period.

Vacancy rates of at least 3% should be an objective of public policy and higher when markets have suffered from extended periods of very low vacancies.

Only when there is sufficient slack in the market will we see renters with enough choice to drive rents down to a level that demonstrates real competition between landlords.

The kind of competition that also induces them to fix up properties, offer incentives, offer security of tenure and treat tenants with respect etc

As the figures show in most Australian markets there is still MASSIVE shortages of rental properties available for rent.

It has taken years of vacancy rates above 4% to produce real improvement in the Perth market. That is the sort of time period that other cities need vacancy rates above 4%. The “cure” takes time.

And yes if home owners are not making vacant properties available for rent they are meaningless. Air BnB and similar services are here to stay so wishing it were otherwise is just a waste of time – it represents a one time increase in the level of demand that only lots of new construction can address.

A lot of the shortage deniers simply dont understand that people dont live in theoretical oversupplies.

Until those empty properties are made available for rent they may as well be on mars.

And if you cant introduce policies to make them available and you still hate new construction then you need to slow the rate of population growth.

Categories: Macrobusiness

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