Vacancy rates tighten in February

Vacancy rates tighten in February

Posted on Thursday, March 20 2014 at 9:23 AM

National vacancy rates tightened in February this year, with one capital recording its biggest drop in almost three years, according to SQM Research.

SQM
says residential vacancies decreased nationally during the month falling 0.1
per cent to come in at 2.1 per cent nationally.

It
was Melbourne’s fall of 0.5 per cent for the month that led the charge, with
the city’s vacancy figure of 2.4 per cent being the lowest recorded for the
city since May 2011.

Louis
Christopher, managing director of SQM, says the figure signals improved
conditions for some Victorian investors.

“It
has been some time since we recorded a definitive decline in vacancies in what
could be a sign that the excess stock seen in Melbourne is starting to be
occupied.”

SQM’s
report confirms a fall in vacancy numbers throughout most Melbourne suburbs,
although it remains cautious of CBD units.

“We
note the Melbourne CBD did too record a fall for the month but its figures are
still up from this time last year and SQM Research continues to retain our
warning for CBD vacancy rates.”

Brisbane
had a 0.3 per cent drop while Darwin dropped 0.2 per cent.

SQM
Research’s Asking
Rents Index revealed that asking prices for rental properties
continued to record mixed stories during February, with the capital city
average showing a 0.7 per cent decrease in asking rents for houses and a 1.2
increase in rents for units since February 2013.

Sydney
saw its asking rents for houses and units rise by 2.3 per cent and 3.6 per cent
respectively.

Melbourne’s
asking rents for houses improved by 0.4 per cent, and for units by 0.8 per
cent.

In
contrast Perth recorded a 10.7 per cent decrease in asking rents for houses and
a 7.4 per cent drop in rents for units in February 2013.

Christopher
says the drop is directly related to a downturn in the mining boom.

“Meanwhile
the sharp falls in rents for Perth are in line with rising vacancies being
recorded there and are a manifestation of a rather rapid decline in demand for
accommodation.”

Toby
Primrose, managing director of Property Management Melbourne, says he’s surprised
by the city’s result and feels the numbers may be skewed by the apartments
being built.

“The
average rents may have gone up only because there’s so many brand new properties.”

He
says tenants from established apartments are willing to pay slightly more to
live in new accommodation, but demand and rents are suffering in older,
established units.

“For
the existing apartments, the rents are generally coming down. Some of them stay
steady just depending on how nice they are.”

Primrose
says the numbers don’t factor in nuances.

“Statistics
can lead you down the garden path… you’ve got to be very careful with
statistics.”

Amanda
Pearce, principal of Amanda Pearce Property Management, says different property
layouts are renting more successfully than other in Melbourne.

“It
depends on where the property is and its appointments as well.

“A
three bedroom apartment, there’s not a lot of them around so you generally get
a lot of interest in them and they let fairly quickly. One bedroom apartments
are exceedingly slow.

“”I
think people like to go into a share situation so they can share their costs.”

 

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