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So rental vacancy rates have had a 16-year low of 1. 3% nationally. Wow, that's scary. That's crazy, right? Scary, yeah.
And that's down... Hardly any properties. That's nothing. Yeah, yeah. And so that's down by 0.
3 for January compared to the previous month. So, yeah, it is scary. So having a look here... What happens when you look at the, I guess, the lowest capital? What was the lowest capital out of all of them?
It was... I think it was Adelaide, wasn't it? Adelaide at 0. 7 or Hobart? Yeah, 0.
- Yeah, wow. So we had Hobart at 0. 3, which is huge. And so Hobart at 0.
3 is little to nothing. And then we only had three capital cities over 1%. So Sydney... Melbourne and Brisbane. 2.
- Melbourne, 2. 7. And Brisbane, 1. 1.
So if Sydney drops down a little bit more, it would hit the balanced mark. So I'd investigate. Our research suggests that 2% is the balanced mark, not 3%. Melbourne is still not in a healthy position at 2. 7, but it has been recovering.
Jan 2021 at 4. 4. December 2021 at 3. 2. And now at Jan 2022 at 2.
- So the trajectory is moving in the right direction. So, Lee, that's a lot of cities below 1% then, just out of our capitals. And the majority of the regionals are below 1% as well. So I guess, what does that mean for rents?
It's hard to find a rental property for people. So basically, with all the rental vacancies over January and the drops that were larger than expected, it's worse for tenants. So the weekly rental listings in February to date have fallen further for our largest capital city. So it's just going to, yeah, it's an acute shortage of rental properties for those people looking to rent. And so, yeah, the shortage has been transitioning into larger surges and weekly rents across the country.
Yeah, so that's a big surge in weekly rents. I mean, we were looking at numbers and I think, I'm just trying to remember one scenario. I remember one scenario where we had a client and a rental appraisal was given to them. I think it was in Coffs Harbour. The rental appraisal was $680 to $710.
And they decided to go for $780, which at first, I had no answer as to how they even came up with that number or what made them feel confident. They just wanted to get the property. But then they saw something online. They're like, we didn't want to lose out. No, I mean, this is the property buyer.
They're like, let's try $780, see how it goes. And so they tried $780, $785, and they got it in the first open home. So that's almost $100 more per week than appraisal, which is huge. But that goes to the tenant's mindset, the to-be-tenant, is they want to snap it up. They want to snap it up.
It was first open, done and dusted. And then you've got places out in the regional Queensland markets of Bundaberg, Harvey Bay, Toowoomba. So it's very competitive. Very competitive. So it's unreal.
I mean, even in Adelaide, just to give people some context, I remember a couple of years back, max maybe a year and a half, two years ago, a three-bedroom, one-bathroom in the burbs was renting for maybe low fours, and now we're already up to $500 a week. So that's $5,000 plus a year in increase for tenants and also impact from owners. So that's huge. What that means, though, is that when we break down a supply analysis, we talked about new builds and the sugar rush of home builder falling off. Now we've got rental vacancy, sort of 16-year low.
So we've also got rising finance. So now we've got more people trying to buy, less properties available for rent, and the sugar rush is off the building, and that's tumbling back down to well below pre-COVID levels. So, Lee, let's go through the recent report by PropTrack. So PropTrack, also known as, I guess, realestate. com.
au, and this is where people are going to get quite conflicted with the listings report, right? So could you give us your thoughts in terms of what's happening on the PropTrack listings report that you read? So property markets around Australia have had a busy February, and so they've been continuing the strong start for 2022. So essentially new listings nationally on realestate. com.
au have picked up by 27. 3% month-on-month in February, and also new listings were 13. 5% higher than they were February in 2021. So that's the part where people are going to go, oh, my God, lots of listings, listings are everywhere. And this is the key where many make mistake with data.
At the start of this episode, I was talking about the importance of not looking at a peak period of returns and using year-on-year data in the year following the peak. So short answer is yes, we've come off the peak of gains. We've come off the peak of extremely tight housing conditions and low stock. But when we think of using it now versus this time last year, it's not going to tell you the true picture of how bad the supply crisis is in Australia. Yes, there's more people now able to have access to listings because that's clearly there.
New listings were higher, correct? New listings were higher month-on-month and this time last year, correct? But this is where we start to look at it from a research perspective from this time pre-COVID, this time last year, this time three years ago, this time five years ago. Because the key is that when you're looking at data, if you go from this time five years ago, the problem there is that you look at it and you go, whoa, the supply is way lower. But if you look at it from this time to last year, you're going to look at it from last year and go, oh, wow, supply is way higher.
But when you look at it in comparison to five years ago, it's still quite low. If it's higher than this time last year and this time last year produced 25% gains across many cities, don't think that it's a sign of pressure relief to that extent where you can go, now prices fall. If you look to this time five years ago and listings were substantially higher and five years ago, listing levels that were lower than today are causing market declines, then one could assume that declines are on its way if the listings are much higher than five years ago where there was a decline in, say, a certain given market. So this is the key to looking at that lens from just year on year and looking at it from the year prior. Were there any cities that stood out for you that released a lot of supply in comparison?
So the highest supply out of all the states for month on month was Canberra for 44%. And with that 44%, that's coming off like January, right? So January coming on to Feb, it's actually fairly normal for month on month supply to increase quite rapidly. So that can be deceiving. What about the year on year?
Because I think that's a little bit more of an interesting picture. Where was the one that stood out the most? That was actually Darwin for 26. 7%. Yeah, and this is one where I've actually been recently asked to comment on Darwin a couple of times.
And this is happening in Perth as well. So Perth is up 23. 9% on year on year listings. And what I'm noticing is that markets that were stung quite heavily in the past, for example, the mining boom, people are using as this good time to be able to get out in their assets because they are getting to break even finally. And so with that break even, what people are realizing that, okay, hey, I've been able to recoup it because of these 20, 30% gains might be a good time to get out.
And so from a year on year perspective, you're suddenly seeing a big jump in a few of those cities, even in some of the regionals where they've had some declines in the past. So that's kind of what I'm seeing on the year on year as well. So interesting that Darwin definitely is telling that picture alongside with Perth where people are kind of dishing out their assets that they want to get rid of after kind of having some years of being stung. But this is where we come back to that point, right, Lee, which is the last year's data and using year on year off the back of a big boom versus what we're looking at from, you know, the huge change in the country's data. So when we looked at the country's data of five years ago versus now and then three years ago versus now, the national data, we use SQM research and the SQM research that we looked at told us a very interesting picture.
And what we found was that when it came to national data and looking at it from the years prior, the shortage in dwellings is actually far worse than what many people are led to believe. So right now, when you look at year on year prop track data, it shows that we're seeing 20% jumps from this time last year, 14% jumps. And of course, we're going to see a jump from this time last year when you think of listings data in a boom period coming off to slightly less of a boom than the year that was. But what we're seeing is that nationally, February ending, there was 154,000 dwellings listed for sale. This time three years ago, there were 266,000 dwellings for sale.
