Rental markets across Australia remained tight at the end of 2021 despite an increase in vacancy rates.

Domain’s latest report showed a marginal increase in Australia’s vacancy rate to 1.7%, but this figure was still lower compared to previous years.

The increase in vacancy rates was driven by all capital cities save for Hobart and Adelaide, whose vacancy rates held steady at multi-year lows.

On a yearly basis, only Darwin registered an increase in vacancy rate.

	Dec-21	Nov-21	Dec-20	MoM ∆	YoY ∆
National	1.7%	1.5%	2.4%	↑	↓
Sydney	2.6%	2.3%	3.7%	↑	↓
Melbourne	3.2%	3.0%	5.2%	↑	↓
Brisbane	1.3%	1.2%	1.8%	↑	↓
Perth	0.6%	0.5%	0.9%	↑	↓
Adelaide	0.4%	0.4%	0.7%	–	↓
Hobart	0.3%	0.3%	0.5%	–	↓
Canberra	1.0%	0.9%	1.3%	↑	↓
Darwin	1.3%	0.9%	1.0%	↑	↑

Data provided by

Domain chief of research and economics Dr Nicola Powell said despite the slight increase in the number of available rental properties in December, conditions continue to point to a landlord’s market.

“Early in 2022, it’s likely we’ll see decreases in the number of vacant rental properties as strong historical rental demand in January reduces the number of vacant rental listings,” Dr Powell said.

The case, however, could be different for Sydney and Melbourne, where vacancy rates have risen the most among all capital cities.

Sydney recorded its second month in a row of rising vacancy rates up to 2.6%, the highest level since May 2021 and the same rate achieved in March 2020.

At the end of December, the city recorded a 13.8% increase in rental listings.

In Melbourne, vacancy rate hit 3.2%, which ended the downward trend that included four consecutive months of declining vacancies.

While Melbourne’s vacancy rate is lower on a yearly basis, it remained significantly elevated, roughly twice as high as pre-COVID levels.

“It will be interesting to see what 2022 brings and if there is a shift towards a landlord’s market in the two biggest property markets,” Dr Powell said.

“Rental markets will be under further strain as borders reopen and the flow of international students, overseas migrants and expats resume.

“Sydney and Melbourne are likely to be under greater pressure as historically they have welcomed more overseas migrants than other cities.”

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Photo by @apriiil on Unsplash.