High vacancies benefit tenants

High vacancies benefit tenants

Posted on Wednesday, June 18 2014 at 2:25 PM

Increased vacancy rates in rental properties throughout Australia are swinging the advantage towards tenants, according to analyst SQM Research.

The company says a
large jump in vacancies during April this year has continued into May, confirming
the rise was no anomaly.

“This result clearly reveals that last month’s jump was indicative of a
genuine increase in rental dwellings onto the market, and not merely seasonal

SQM says the number of
residential vacancies decreased only marginally during May, coming off 0.1 of a
percentage point to record a 2.2 per cent vacancy rate nationally.

Canberra, Melbourne and Darwin were the only capital cities to record
monthly decreases in vacancy rates, but each was marginal.

Louis Christopher, managing director at SQM Research, says vacancy rates
will likely increase over the next two years, which will benefit renters.

“Rental growth so far this year has been patchy as a result of the
moderate increase in supply of available rental properties and I believe
vacancy rates will continue to gradually rise over the course of 2014, with the
longer term view that the large increases in building approvals will translate
to higher vacancy rates in 2015 and 2016.

“Overall it is going to be increasingly difficult for landlords to lift
the rent for the foreseeable future.”

This outlook is bolstered by SQM Research’s Asking Rents Index which also shows
average rents across all capital cities has remained flat at $528 per week for
houses and $416 per week for units.

SQM Research says stagnation in these figures reveals the difficulty
landlords will have in increasing their asking rents.

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