Rental vacancy rate plummets to record low as Australia’s housing crisis deepens

Advocates say the crisis will only become even more severe without government intervention

The share of properties available to rent in Australia has hit a record low after the national vacancy rate recorded its largest drop in over a year, a new report has revealed.

Rental vacancy rates fell 0.14 percentage points in August to hit a new low of 1.10%, with the share of rental properties on the market now 54% lower compared with pre-pandemic levels, the report by property data firm PropTrack shows.

The data come as advocates for housing affordability argue that without government intervention, the crisis will become more severe.

PropTrack economist and report author Anne Flaherty said there was “a host of drivers” that have led to the tight vacancy rate, including a growing population, the number of people in each dwelling falling 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 now hit its worst level in at least three decades, according to PropTrack. Households earning a median income of just over $105,000 can afford the smallest share of homes since 1995 when records began, at just 13% of homes sold in the past year, a report from PropTrack revealed last week.

“The amount homebuyers are having to save is incredibly high,” Flaherty said. “Those mortgage repayments are very, very high and the amount that they can borrow is less. So that’s also keeping people in the rental market longer.”

The supply of vacant rental properties in regional areas has also deteriorated, with the vacancy rate falling to just 1.1%.

“Rents are predicted to continue rising off the back of these incredibly low vacancy rates, which are driving up competition for properties,” she said. “But if rents reach high enough, it might lead to a tipping point for some tenants where the amount they would be paying in mortgage repayments would be less than their rent.

“So I think that when we start to see that happen, that could lead to a bit of a shift.”

Maiy Azize, a spokesperson for the housing affordability advocacy group Everybody’s Home, said the low vacancy rates proved “only the federal government can create affordable rentals for the people who need them, when and where they need them”.

“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. We’re calling on the government to act now and end the shortfall for good.”


Cait Kelly

The GuardianTramp

Related Content

Article image
Could rent controls ease Australia’s housing crisis?
Advocates say caps or freezes may help reduce pressure on renters but experts warn they are not a simple fix

Elias Visontay Urban affairs reporter

27, Jun, 2023 @3:00 PM

Article image
Australians seek share houses in soaring numbers as housing crisis bites
Latest data from accommodation platform points to rise in resident homeowners renting out spare rooms

Cait Kelly

08, Nov, 2023 @2:00 PM

Article image
Australian-first affordable rental scheme a ‘massive relief’ for Victorians faced with housing crisis
Exclusive: About 2,400 homes will be available for low- to middle-income renters under ‘big housing build’

Benita Kolovos

06, Jun, 2023 @3:00 PM

Article image
Housing prices back at record levels, defying Australia’s interest rate rises
The 7.5% drop from the April 2022 peak has been recovered, but some cities are faring better than others, CoreLogic analysts say

Peter Hannam

22, Nov, 2023 @2:00 PM

Article image
Enjoy it while you can: July’s RBA rate pause is likely to be fleeting, unless a lot goes right
Inflation remains too high globally – and Australia’s may still be ‘out of whack’ by the time the board next meets in August

Peter Hannam Economics correspondent

04, Jul, 2023 @3:00 PM

Article image
Raising a newborn in a sharehouse: the challenges for new parents during Australia’s housing crisis
‘I don’t think it’s unreasonable to want to be able to provide a safe, healthy home on a professional salary’, says Ada Fitzgerald-Cherry

Cait Kelly

23, Sep, 2023 @8:00 PM

Article image
Australian rental vacancy rate falls to record low, data shows
Limited supply and strong demand prompts national median weekly advertised rents to rise 14.6% over the year

Cait Kelly

29, Oct, 2023 @2:00 PM

Article image
Can your suburb help fix Australia’s housing crisis? It all comes down to density
Despite adding millions of people and dwellings over the past decade, our cities are well behind globally in terms of population density

Josh Nicholas

04, Jun, 2023 @3:00 PM

Article image
Affordable rental properties in Australian capital cities at ‘record low’
Just 16.2% of all rentals listed for $400 or less in April 2023, down from 30.2% in 2022

Cait Kelly

22, May, 2023 @3:00 PM

Article image
Young Australians forgoing necessities as cost-of-living crisis deepens wealth divide
Social and mental wellbeing of millennials and gen Z at risk as they juggle studying with rising rents and low-paid work

Mostafa Rachwani

02, Sep, 2023 @8:00 PM