Australia's rental market has tightened further, with the national vacancy rate plunging to a record low of 1.10% in August, according to property data firm PropTrack. The 0.14 percentage point drop represents the largest monthly decline in over a year, and the share of rental properties on the market is now 54% lower than pre-pandemic levels.
PropTrack economist Anne Flaherty attributed the squeeze to a growing population, declining household size, and first-home buyers being locked out of the market. 'For renters who may be looking to become first-home buyers, they’ve faced a situation where because of interest rate rises, they can borrow 30% less on average,' she said. 'But at the same time, property prices are still sitting as high as ever.'
Housing affordability has hit its worst level in at least three decades. Households earning the median income of just over $105,000 can afford only 13% of homes sold in the past year, the lowest proportion since records began in 1995. Regional areas have also seen vacancy rates fall to just 1.1%, intensifying competition.
Flaherty warned that rents are expected to keep rising, but added that if mortgage repayments become cheaper than rents, some tenants may shift toward homeownership. Advocacy group Everybody's Home called for government intervention, with spokesperson Maiy Azize urging the creation of 25,000 new social homes annually to address the shortfall.
