Australia's rental vacancy rate has fallen to a record low of 1.10%, according to a new report by property data firm PropTrack. The national vacancy rate dropped 0.14 percentage points in August, marking its largest decline in over a year. The share of rental properties on the market is now 54% lower compared to pre-pandemic levels.
PropTrack economist Anne Flaherty attributed the tight vacancy rate to a growing population, fewer people per dwelling, and first-home buyers being increasingly locked out of the market. 'For renters who may be looking to be first home buyers, they've faced a situation where because of interest rate rises, they can borrow 30% less on average,' Flaherty said. 'But at the same time, property prices are still sitting as high as ever.'
Housing affordability has hit its worst level in at least three decades, with households earning a median income of just over $105,000 able to afford only 13% of homes sold in the past year. Flaherty noted that high mortgage repayments and reduced borrowing capacity are keeping more people in the rental market for longer.
The crisis is also affecting regional areas, where the vacancy rate has fallen to 1.1%. Flaherty predicted that rents will continue to rise due to low vacancy rates, but warned that if rents become too high, some tenants might find mortgage repayments cheaper than rent, potentially shifting the market.
Maiy Azize, spokesperson for housing affordability advocacy group Everybody's Home, called for federal government intervention. 'For years governments have been walking away from social housing, relying on the private sector to deliver affordable homes,' Azize said. 'These numbers show that's a dangerous approach. Australia's social housing shortfall is massive. We need to create 25,000 new social homes across the country every year.'
