Australia’s home-rental vacancy rate is approaching a record low, driving rents higher as a lack of supply combines with increased immigration to produce a housing crunch.
(Bloomberg) — Australia’s home-rental vacancy rate is approaching a record low, driving rents higher as a lack of supply combines with increased immigration to produce a housing crunch.
The national vacancy rate fell to 1.1% and rents climbed 2.5% in the first three months of the year from the prior quarter, data from property consultancy CoreLogic Inc. showed Wednesday. Sydney is Australia’s most expensive city to rent in with an average price of A$699 ($472) a week.
Australian House Prices Snap Declines as Sydney Market Surges
“There’s already a chronic undersupply of advertised rental stock in many parts of the country that’s translated into record low vacancy rates across most capitals,” said Kaytlin Ezzy, CoreLogic economist and author of the report. “Such a low number of available rentals is a key factor that pushed rental values higher again.”
High interest rates, soaring immigration and rising labor and construction costs have contributed to the shortfall, according to a report by the National Housing Finance and Investment Corp. The country is expected to face a shortage of more than 100,000 homes over the next five years.
“The return of overseas migration has contributed to the capital city rental trend reacceleration,” Ezzy said. “Net migration is forecast to remain strong for some time yet and this will only add further upwards pressure on rental values.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.