Growing rental shortages bad news for Canberra tenants

Vacancies in Canberra’s already tight home rental market continue to shrink increasing the grim prospect for tenants of rising rents.

Latest Domain data reveals that Canberra’s vacancy rate for houses tightened slightly over January from the 1.2 per cent recorded over December to 1.1 per cent. Vacancy rates in Canberra, however, have also fallen over the past year down from the 1.3 per cent recorded over January 2014.

Canberra continues with clearly the lowest vacancy rate for houses of all the mainland capitals with only Hobart recording a lower rate over January at just 0.9 per cent.

Vacancy rates for units in Canberra also tightened sharply over January and although this may reflect some seasonal impacts, the trend over the past year is clearly downward. The unit rate fell from 2.8 per cent to 2.3 per cent over January and is now well down on the 3.6 per cent recorded over January last year.

Despite significant recent levels of new apartment supply in Canberra, rental demand for units appears to be increasing with tenants shifting to this property type reflecting the shortage and relatively high cost of houses for rent. Canberra now also has one of the lowest vacancy rates for units of all the capitals.

Ngunnawal (15), Gungahlin (13) and Kambah (11) are the Canberra suburbs with the highest house rental vacancies with Kingston (36), Braddon (32) and Belconnen (30) offering the highest unit vacancies in January.

The Canberra rental market continues to tighten with now the lowest overall home vacancy rates of all the mainland capitals. Rental shortages will continue to put upward pressure on rents which is clearly unwelcome news for local tenants.

Dr Andrew Wilson is Domain Group’s chief economist. Twitter@DocAndrewWilson – My Property 2UE Fridays 2pm-3pm, Saturdays 12.30pm-1pm