Vacancy Rate Property Investment Insights
SQM Vacancy Rate info this month shows the national residential rental vacancy rate increased in June 2019 to 2.3%, up from 2.2% in May.
Vacancy Trends in Capital Cities
Nearly all capital cities recorded minor increases ranging from 0.1% to 0.2% over the month. Sydney continues to have the highest vacancy rates in the country at 3.5%, an increase of 0.2% — the highest since 2005. Perth’s vacancy rate is not far behind at 3.2%, increasing 0.1%, while Melbourne’s rate rose to 2.0%.
Why Vacancy Rate Matters
So what does all this mean for investors? Vacancy rate is a key metric in property investment. The lower the vacancy rate, the better. We prefer investing in markets with a vacancy rate around 2% or lower (1.5% is even better).
For example, one recent investment property we purchased for a client in Cooma had a vacancy rate of just 0.6%, falling further due to infrastructure projects and employment growth. Rents in that town are rising rapidly.
Impact of High vs. Low Vacancy Rates
High vacancy rate: Falling rents, lower than anticipated yields, negative cashflow, and empty property for weeks in between tenants. In short, high vacancy = stress!
Low vacancy rate: Rising rents, improved cashflow, multiple tenant applications to choose from, short vacant periods, and a much more enjoyable property ownership experience.
Top Low-Vacancy Areas to Consider
Below are 20 fantastic areas with vacancy rates under 2% and infrastructure reasons why they are worth considering:
New South Wales
Jindabyne 0.2% – NSW primary ski tourist area, now a growing year-round tree change and summer biking destination.
Murrumbateman 0.3% – Rural tree change option, commuter access to Canberra, nearby wineries.
Yass 0.3% – Thriving beef/sheep region, rural commute option for Canberra workers.
Cooma 0.6% – Affordable, distant commute to Canberra; Snowy Hydro 2.0 project attracting tenants.
Kurri Kurri 0.8% – Close to new Mainland Hospital, affordable older homes with larger blocks near Newcastle.
Tweed Heads 0.9% – Ideal retirement climate, growing international airport, regional hospital, tourism and surf/beach industry.
Coffs Harbour 1.1% – Retirement-friendly climate, regional airport, quality beaches.
Unanderra 1.1% – Express trains to Sydney, near Wollongong University, affordable southern suburb.
Lennox Head 1.1% – Surf, beaches, and growing arts scene; ideal retirement destination.
Banora Point 1.1% – Affordable compared to Byron Bay, new hospital access.
Queanbeyan 1.2% – Affordable housing near Canberra, investor-friendly regulations.
Dubbo 1.2% – Central NSW hub, university, hospital expansion, agriculture and mechanical services.
Goulburn 1.3% – Canberra commute option, correctional facility nearby.
Cessnock 1.5% – Historical buildings, growing coffee culture, near new hospital, affordable larger homes.
Dapto 1.5% – Express train to Sydney, near Wollongong University, new developing suburbs south and west.
Albury 1.5% – Major regional hub, inland rail project, logistics centre, Army Base.
Wagga Wagga 1.7% – University, hospital expansion, Army Base.
Warilla 1.7% – Coastal Wollongong suburb, beaches, lake, new marina, train station, road bypass.
Shell Cove 1.8% – Southern Wollongong suburb, beaches, lake, marina, road and hospital expansion.
Nowra 1.9% – Sea-change destination, improved road access, major hospital expansion, coffee culture growth.
Summary and Takeaways
Many attractive options exist outside inner Sydney and Melbourne. As always, research your markets thoroughly and visit the area.
To help refine your investment strategy, see Why Choose Precium, our Market Insights & Blog, or watch our Property Videos for deeper analysis.
Low vacancy rates can significantly reduce investment risk and improve long-term returns. Use this information as part of your broader due diligence.
