Canberra can’t build units fast enough to meet the rental demand. Photo: Region Media
Canberra’s rental squeeze has eased ever so slightly in recent months but the signs are that the competition for accommodation is about to get even more intense as interest from overseas picks up.
The latest data from SQM Research shows Canberra’s crushing vacancy rate edging up to 0.8 per cent from 0.7 per cent a month ago. In March it was just 0.5 per cent.
There were 577 vacancies in June compared with 514 in May and only 350 in March.
Rents have been relatively stable recently but Canberrans are still shelling out more than any other capital city for an apartment at an average of $567 a week at the week ending 14 July. Asking rents for houses, if you can find one, are $766, the second highest in the country after Sydney.
The 12 month figure shows how much of a landlord’s market it is with unit rents surging by 13.6 per cent and houses up 6.6 per cent.
Real Estate Institute ACT President and property manager Hannah Gill said the slight increase in the vacancy rate was welcome but the situation remained depressingly familiar – very tight with no relief in sight.
She said the vacancy numbers were still well below a healthy vacancy rate of 2-3 per cent.
“Under 1 per cent I would not even call it a vacancy rate, that’s really just people moving between properties,” she said.
Rents were following the sales market, where apartments had taken over from houses as the leader.
Government workers coming to Canberra were still driving the market but there were also lots of students, and people coming from overseas who were not yet in Australia.
With the universities again ramping up international student numbers and migration restarting, demand is likely to only intensify.
Early in the year, it was common for groups of 30 to 40 people turning out to inspect properties. That has dropped back to five to 10 people at a time but Ms Gill said these were all genuine applicants.
She said some were desperate enough to offer to pay above the market rent to get in the door.
Some were taking months to secure a property, especially those from interstate who were finding it really challenging because the market was moving so quickly.
“They’ll be saying I’m coming down next Saturday can I have a look at a, b and c and by the time they get down these property are gone,” Ms Gill said.
For those at the lower end of the market the situation is bleak, with just no affordable private rentals on offer in Canberra.
“They’re having to share with multiple people and again that’s a challenge to find a suitable house, or equally we’re needing guarantors on the leases because the tenants themselves can’t afford the property, so they’re getting a parent or someone to go as a guarantor,” Ms Gills said.
Recently, Ms Gill’s agency, The Property Collective, let 49 apartments from the same development, and “you could say that of any new development released”.
While there were new high density developments being completed these were not enough to make a dent in the demand, she said.
For those seeking cheaper rents and the prospect of a house over the border, the situation was just as tight.
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