The most competitive on record given the historically low rental stock

The Most Competitive Changeover Period Ahead

Vacancy rate at an all-time low for the third month 

Monday, 4 December 2023: For the third consecutive month, Australia’s vacancy rate looms at 0.8% - a record low, according to Domain’s latest Vacancy Rates Report for November 2023. Nationally, the average views per rental listing declined in November, indicating a slight easing of demand relative to total supply. However, as the rental market changeover period begins, it is forecasted to be the most competitive on record given the historically low rental stock. 

“While the rental market continues to be a landlord's market, we are seeing signs of stabilising conditions in some markets - Sydney, Melbourne and Brisbane experiencing a slight increase in vacancy rates. In the upcoming months, while we do expect to see a seasonal lift in vacancy rate as rental supply traditionally increases, it will be met with higher demands as the changeover period kicks off,” said Domain’s Chief of Research and Economics, Dr Nicola Powell.

“It has certainly been a tough year for renters. In 2024, we do anticipate the rental market to reach a tipping point driven by stretched affordability. More renters opting for house shares and first-home buyer incentives will help transition some to being owners or fast-track others to a more affordable purchase,” said Powell. 

Table 1. Monthly vacancy rates.

Looking at the capital cities movement:

Sydney’s vacancy rate has increased, from the previous month's record low, to 1.0%. This is the first monthly rise since June, driven by a surge in rental supply. Average views per rental listing have declined over the month, highlighting potential relief. However, there needs to be a seismic shift in supply to see significant improvements for tenants. 

Melbourne’s vacancy rate rose to 1.0%. This is the first monthly increase since June, driven by a boost to rental stock. It was also supported by a fall in average views per rental listing, showing a marginal fall in demand. 

Brisbane has seen its second successive monthly rise in vacancy rates, sitting at 0.9%. This is an 11-month high, indicating its rental market is stabilising and moving away from the highly competitive conditions and record low vacancy rate last seen in February. 

Perth’s vacancy rate is steady for the fourth month in a row, at 0.3%, a record low. It is one of two of the most competitive cities for potential tenants. Vacancy rates remain stubbornly tight, emphasising the need for increasing rental stock. 

Adelaide remains the other most competitive city for potential tenants. It is steady for the fourth consecutive month, at 0.3% and 0.1 percentage points off its record low. A significant boost in supply is needed to see a movement away from these tight conditions. 

Darwin’s vacancy rate has jumped to 1.5%, the largest monthly change of the capital cities. This is the highest vacancy rate since July 2020 and it is the highest of the capitals, rising above Canberra this month. This is supported by a drop in average views per rental listing, at its lowest point since the onset of the COVID pandemic. 

Hobart’s vacancy rate dropped for the fifth successive month, to 0.9%. This is the lowest vacancy rate since March 2023. It is now the third-lowest of the capitals, a remarkable shift away from its status as the second-highest vacancy rate in September. 

Canberra’s vacancy rate has fallen to 1.4% and is now the second highest of the capital cities. This is the lowest it has been in a year, however, conditions remain less competitive for tenants relative to other capitals.

Table 2. City areas with the highest vacancy rates.

For the full Domain Vacancy Rates Report for November 2023, please visit here.