What do you think’s going on here? Are we getting sick of each other?
So I’ve flagged this little puzzle before and it’s only getting worse.
So Domain have released their vacancy rate data, which shows that vacancies are down to an incredibly low 1.6%
That is almost ridiculously low, and is the lowest levels in ten years.
All cities have returned to vacancy rates that are lower than pre-pandemic levels reported in February 2020, except Melbourne and Sydney. However, the number of empty rentals have reduced significantly in Sydney and Melbourne.
This will boost confidence among landlords, as renters face increased competition among remaining rental listings, but there will be some areas that will have elevated vacancy rates until international borders reopen…
Vacancy rates remain tight in all of the smaller capital cities, which is likely to translate into higher rents.
And take a look at this table. This has the suburbs with the highest vacancy rates.
In Adelaide, you can get a top-5 finish with a vacancy rate of just 0.7%!
This is how the national picture charts out, with a clear acceleration downwards post-Covid.
The two biggest capitals, and their inner-city high-rise markets are holding the national averages up. Here’s Sydney:
While in the other capitals, we’re looking at rock-bottom levels. Here’s Brisbane:
And as I’ve said before, this is all happening while net immigration has gone negative and the actual population is falling!
So what does that mean? It means household formation must have gone up.
It means that despite Covid people are going out on their own and starting up new households.
Or is it because of Covid? Is it all just getting too tight and squishy living with mum and dad or in the share house?
Do we hate each other that much?
Do people just need to get away from each other for a while, regardless of what it costs us in rent?
It’s the ‘cabin fever’ property boom.
And not surprisingly, with vacancy rates this low, rents are growing at a record pace as well.
And where rents go, prices follow.
So on top of the cheap-money boom we’ve got a cabin fever boom.
And that’s why this boom is already breaking all records.