Landlords received some respite after the nation's rental vacancy rate rose in December, but tenants will continue to face tough conditions in 2024.
The percentage of vacant and available rental properties rose 0.05 percentage points (ppt) to 1.12% nationally in December, according to new PropTrack data. However, the vacancy rate decreased by 0.13 percentage points over the year.
For comparison, under “normal” rental market conditions, vacancy rates would be around 2% to 3%.
Eleanor Cree, senior economist at PropTrack, said that with market conditions tight, many renters were likely spending part of their income on rent, putting a strain on household budgets. .
“Although vacancy rates declined in most markets in December, the rental market remains tight and inventory is extremely limited,” Cree said.
“Low rental vacancy rates indicate a tight rental market, with tenants competing for limited inventory.
“These conditions have made it difficult for many people to find available rental properties, causing prices to rise significantly throughout 2023.”
Since March 2020, the national vacancy rate has decreased by more than half, and the proportion of available rental properties has decreased by 54% in the metropolitan area and 50% in rural areas.
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Throughout 2023, Melbourne experienced the largest tightening of conditions of any market, followed by Sydney and regional Queensland.
Melbourne's rental vacancy rate increased by 0.01 points to 1.18% in December, but was still down 0.33 points for the year.
Sydney's rental vacancy rate increased by 0.09 points to 1.37% last month, but the vacancy rate also declined over the year.
In Brisbane's extremely tight rental market, vacancy rates remained below 1% after rising modestly by 0.02 points in December.
Adelaide and Perth remain the country's toughest rental markets for renters, with just 0.69% and 0.73% of rental properties in each city vacant and available in December.
However, the situation in Adelaide and Perth eased slightly over the year, with vacancies increasing by 0.02 ppt and 0.06 ppt respectively.
Last year, renters had fewer options as the nation's rental vacancy rate fell to 1.12% in December, down 0.13 percentage points from the previous year.Photo: Chris Pavlich
The rental vacancy rate also fell by 0.06 points last month for the region as a whole, but due to difficult market conditions, it fell by 0.07 points over the year.
More renters are paying attention to shared houses
A lack of available rental housing, rapidly rising rents, and a widespread cost-of-living crisis has many renters and homeowners across the country turning to house sharing.
Shared accommodation platform Flatmates.com.au recorded a 22% increase in new members and a 35% increase in new property listings in 2023.
Claudia Conley, community manager at Flatmates.com.au, said: “The rising cost of living and rental crisis has led to a huge demand for shared accommodation, with many Australians turning to shared accommodation to keep costs down. “There is,” he said.
“December is typically one of the slowest months on the platform, but with a 22% increase in new members and a 35% increase in new property listings year over year, all signs point to this summer. This is shaping up to be our busiest summer ever.”
Eleanor Krieg, senior economist at PropTrack, believes tenants are competing fiercely for a limited number of rental properties.Photo: Prop truck
Looking ahead, Cree said tenants will continue to face difficult conditions given the number of vacant properties remains at low levels.
“However, rental market conditions are unlikely to deteriorate at the same pace as in 2022 or 2023, meaning rental prices may remain stable and rise at a slower pace than in previous years,” he said. Ta.
