Why has it been two decades since Australia had a balanced rental market?
A healthy rental market is considered to occur when the vacancy rate is at or near 3 per cent but no city in Australia is, or recently has been, anywhere near that level.
With five of the eight capital cities having vacancy rates below 1 per cent, queues at rental home opens have become lengthy (pictured: contributor Terry Ryder). (Image source: Elzbieta Krzysztof/Shutterstock.com/API Magazine)
The standard used by the residential property industry in Australia is that a balanced residential rental market is a vacancy rate of around 3 per cent.
At that level of vacancy, there is a good level of choice for tenants, and rents will tend to be stable.
If vacancies are above 3 per cent, that would tend to suggest oversupply. If vacancies are well below 3 per cent, then that indicates a shortage, and rents are likely to rise.
But here’s th…
