'No such thing' as an empty Hobart property right now

Data from SQM Research has revealed that vacancy rates nationwide are generally trending while asking rates are trending up, with Hobart benefiting the most.

Nationwide, the vacancy rate for August was at 2.2 per cent with 71,540 homes, down from 2.3 per cent in July.

Hobart saw the smallest vacancy rate for the month at 0.4 per cent, down from 0.5 per cent, which SQM Research said was the smallest rate since it started tracking the rental market in 2005.

Simon Pressley, head of research at Propertyology, said that investors should be envious of those already in Hobart.

“There’s no such thing as an empty property in Hobart right now,” Mr Pressley said.

"If a tenant of a property has indicated that they are not renewing their lease at the end of the term, the property manager will have a long list of waiting applicants.

“Property investors are in an enviable position wherein current yields are probably already covering all of their costs and rental income is now destined to shoot higher.”

Citing Propertyology research, price growth in Hobart has risen to 35 per cent growth since 2014, in addition to no annual holding costs as well as the prediction of rises for both values and rents.

“The typical three-bedroom house in Hobart currently rents for $360 to $450 per week, which is significantly more affordable than most parts of Australia, so there’s still plenty of scope rents to increase,” Mr Pressley added.

Meanwhile, Sydney and Melbourne vacancy rates were steady at 2 per cent and 1.7 per cent, respectively, while other capital cities recorded declines: Adelaide fell from 1.8 per cent to 1.6 per cent, Canberra fell from 1.2 per cent to 1 per cent, Darwin fell from 2.9 per cent to 2.5 per cent (it’s seventh monthly vacancy rate fall in a row), Brisbane fell from 3.3 per cent to 3.1 per cent, and Perth fell from 4.9 per cent to 4.6 per cent.

Managing director of SQM Research Louis Christopher said that the current rental market is slightly in the landlord’s favour.

“There is nothing in our numbers to suggest the market is about to be hit with oversupply,” Mr Christopher said.

“Dwelling completions should peak in early 2018, and given the pronounced year-on-year declines in building approvals, we believe rents will likely rise at a faster pace [in] 2018 than what has been recorded in 2017, thus far.

“We now have mounting concerns for significant rental shortages in 2019 in Sydney and Melbourne.”

Asking rates for capital cities for the last 30 days to 12 September were up by 0.4 per cent to $549 a week for houses, while units held steadily at $438 a week; the same are also up year-on-year by 2.4 per cent and 1.9 per cent for houses and units, respectively.

Just like it was the highest performer in vacancy rates, Hobart was also the capital city with the best performance for speed in rental increases for houses by 2.4 per cent at 4.2 per cent for the last 30 days and 14.5 per cent for the last 12 months. Hobart’s unit weekly rents were not as fortunate, falling by 3.9 per cent.

As for the other capital cities, here are the numbers in terms of weekly rents over the last month:

Sydney saw a rise in house values at 0.6 per cent but a fall of 0.2 per cent;
Melbourne house values held steadily and unit values rose by 0.2 per cent;
Canberra saw rises for house and unit values at 1.1 per cent and 1.4 per cent, respectively;
Darwin saw a rise in house values at 3.2 per cent but a fall in units at 1.7 per cent;
Brisbane saw a rise in house values of 0.3 per cent and a fall in unit values of also 0.3 per cent; and
Adelaide saw a rise in house values at 0.4 per cent and a fall in unit values at 0.3 per cent.

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