CoreLogic’s latest Housing Chart Pack revealed a slight increase in national vacancy rates, indicating a loosening rental market after a prolonged period of low supply and high demand.
Vacancy rates have risen to 1.8%, up from last year’s record-low of 1.4%.
CoreLogic economist Kaytlin Ezzy (pictured above) highlighted that annual rental growth has slowed from a peak of 9.6% two years ago to 5.8% this October.
“Rental growth has eased significantly from the height of the rental crisis,” Ezzy said, citing factors like a decrease in net overseas migration and renters forming larger households to share costs as easing demand.
Supply has also expanded due to heightened investor activity, with new investor financing up by 29.5% in the year to September.
Investors accounted for 38.3% of all new financing, surpassing the decade average of 33.8% and contributing to the increased rental stock.
Vacancy rates have increased across most major cities, except for Hobart. Brisbane and Adelaide saw the largest increases, with rates rising by 60 basis points each over the past year.
Perth, with one of the lowest vacancy rates at 1.2%, continues to experience rental shortages, contributing to a 9.6% annual rise in rental values.
CoreLogic reported that advertised property listings rose by 0.8% over the five-year average, reflecting a more diverse range of available stock for buyers.
Days on market have also increased, averaging 33 days in the three months to October, up from 27 days this time last year, as buyer urgency has diminished.
Looking forward, CoreLogic anticipates continued easing of rental pressure as affordability challenges temper rental growth and more properties come to market.
“We expect vacancy rates to continue lifting as affordability pressures mount,” Ezzy said, suggesting the market may see a shift from last year’s tight conditions.
Another CoreLogic report showed an increase in auction activity, with close to 2,900 homes set for auction across the combined capitals this week, up from 1,972 last week. Melbourne alone is hosting 1,325 auctions following a quieter period due to the Spring Racing Carnival.
Clearance rates, however, remain below 60% nationally, a sign of slower market movement, with Melbourne and Sydney each showing lower clearance rates than the same time last year.
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