National vacancy rate rises to 1.4 per cent as Sydney and Melbourne loosen

Australia's national rental vacancy rate rose to 1.4 per cent in September, up from 1.3 per cent in August and 1.2 per cent a year earlier, according to SQM Research, with Sydney and Melbourne leading an easing that is showing up first in the unit market.

SQM counted 42,290 vacant rental properties nationally in September, up from 41,039 in August. Sydney's vacancy rate rose to 1.8 per cent from 1.7 per cent and Melbourne's to 1.9 per cent from 1.8 per cent. Canberra moved the other way, falling to 1.9 per cent from 2.1 per cent, and Hobart eased to 0.5 per cent from 0.6 per cent. Darwin rose to 0.6 per cent from 0.4 per cent, while Brisbane held at 0.9 per cent and Perth and Adelaide at 0.6 per cent.

National combined asking rents rose 0.3 per cent over the 30 days to 12 October to $704.76 a week and are 7.6 per cent higher than a year ago. Beneath that figure the two property types moved in opposite directions: house rents rose 1.6 per cent over the month while unit rents fell 1.6 per cent. The capital city average combined asking rent was $794.57 a week.

In Sydney, house rents rose while unit rents fell 1.0 per cent. Hobart unit rents fell 5.4 per cent in the month but remain 14.6 per cent higher than a year earlier, and Darwin recorded the strongest annual growth in combined rents of any capital at 13.9 per cent.

SQM Research managing director Louis Christopher said the rise in vacancies pointed to a gradual easing in rental conditions, led by Sydney and Melbourne. "Sydney is the market to watch," Mr Christopher said.

He said the more telling signal was in units. "That divergence suggests rental pressures are beginning to ease, starting with the unit market," he said. Mr Christopher added that tenants in Brisbane, Perth, Adelaide, Darwin and Hobart were still seeing little relief, with vacancy rates in those cities remaining below 1 per cent.

For property managers, the figures describe two different markets. In Sydney and Melbourne, more vacant stock and falling unit rents point to more competition for tenants, which is likely to bring rent-setting and days on market back into owner conversations. In the tighter capitals, where vacancies remain below 1 per cent, the conditions owners have grown used to are largely unchanged.