Why rents are dropping in Canberra, ACT
In one city the vacancy crisis is over… but there is more bad news for Sydney and Melbourne
- The rental crisis is over in Canberra
- Everywhere else tenants are still suffering
Canberra is the first city to recover from the vacancy crisis as tenants across the rest of Australia continue to suffer.
New data from SQM Research showed that the home of Commonwealth officials was the only metropolitan market where home rents have fallen over the past year.
In April 2023, Canberra’s vacancy rate was 2 per cent – a level significantly above the national average of 1.2 per cent.
Louis Christopher, managing director of SQM Research, said Canberra’s vacancy crisis eased as fewer people able to work from home moved to smaller towns and regional areas.
“I believe there has been a population exodus to our larger cities, driven by a return to the office requirement from many office employers,” he said.
“The rental crisis is easing in the regions of the country, as well as in some of our smaller capitals, including the country’s capital, where we can now confidently end the rental crisis.”
Canberra is the first city to recover from the vacancy crisis as tenants across the rest of Australia continue to suffer (pictured is Telstra tower)
Canberra’s median house rent has fallen 0.6 percent over the past year to $757.84 a week, making it the only Australian capital city where rents are cheaper than a year ago.
Sydney, by comparison, has seen average house prices rise by 21.5 percent to $963.18 per week, making it by far Australia’s most expensive capital.
The rental vacancy rate here is 1.4 percent.
Average house rent in Melbourne is up 20.8 percent to $671.53, in a city where the rental vacancy rate is 1.2 percent.
Australia’s two major cities, Sydney and Melbourne, also take in the most new overseas migrants.
Sydney by comparison has seen average house prices rise 21.5 per cent to $963.18 per week, making it by far Australia’s most expensive capital (pictured is a rental queue in Bondi)
Treasury budget documents predict Australia will take in a record 400,000 new migrants in 2022-2023, followed by another 315,000 in 2023-24.
In five years, 1,495 million people are expected to arrive in Australia, from skilled migrants to international students.
For that reason, Mr. Christopher expects the rental crisis to continue in the larger capitals.
“In the future, it is far too early to end the rental crisis in our larger capitals,” he said.
‘The construction crisis in combination with the extremely strong population growth ensures that there remains an overall shortage of rental housing.’