Rental vacancy rates are a clear matter of supply and demand: Victoria needs a secure pipeline of rental housing stock to accommodate the increasing number of renters.
Population growth is also a significant issue, as is increases in transient worker populations on large infrastructure projects, particularly in regional Victoria. Investors are retreating from the market with finance restrictions, regulatory uncertainty and tax imposts all major factors.
Regional Victoria’s rental vacancy rate is sitting at its lowest level since the Real Estate Institute of Victoria began collecting this data, at 1.3 per cent as at November 30, 2018 which means that for every 1,000 rental properties, only 13 of them are available. The figure has continued to drop from 2.1 per cent in November 2017.
The reduction in the overall Victorian vacancy rate is less pronounced at 1.9 per cent and 2.1 per cent respectively. A vacancy rate of at least three per cent is required for a healthy rental market: where there is enough vacant housing supply to meet demand.
Regional Victoria’s rental vacancy rate is lowest in Bendigo and Loddon and Ballarat and Central Highlands at 0.7 per cent at 30 November 2018, compared with 1 per cent and 1.9 per cent respectively in November 2017.
Vacancy rates are also sitting well below the Victorian rate in Wodonga and Ovens Murray at 1.2 per cent, Latrobe Valley, South and West Gippsland at 1.3 per cent and East Gippsland and Wellington Shire at 1.5 per cent.
Shepparton and Goulburn, Warrnambool and the Western District and Mildura and the Mallee all have a vacancy rate of 1.6 per cent with the biggest drop from 12 months recorded in Mildura and the Mallee which had a rate of 4.2 per cent in November 2017. The Wimmera has a vacancy rate of 1.9 per cent while Geelong and the Barwon Region have the highest vacancy rate in Regional Victoria at 2.0 per cent.
The REIV will continue to advocate for an easing of the property tax burden to incentivise investment in housing, in particular investment in rental stock.
To find out more about the vacancy rate in your area, head to the REIV website Market Insight page.