Australian housing markets are dynamic and have big variations from area to area. Investors can use indicators like vacancy rates to better understand these variations and get an idea of supply and demand for certain types of properties in certain markets. Expressed as a percentage, the rental vacancy rate tells you how many properties are empty and available for rent out of all the rental stock in the area.
A high or rising vacancy rate typically means there is greater supply and that tenants are in a more favourable position. When low, landlords have the upper hand in terms of how much rental income they can generate. The vacancy rate is an insightful, high-frequency indicator for the bargaining power of both landlords and renters.
A Look at the Geelong Market
The property market in Geelong has been providing excellent results for investors if you look in the right places. The vacancy rate in Geelong is 2.63 per cent whereas in Greater Geelong it’s 1.37 per cent according to real estate.com.au. This is compared to vacancy rates of 2.8 per cent in Sydney and 1.8 per cent in Melbourne, meaning it is quite high. Inner-city suburbs in Geelong and places like Belmont and Highton are turning over really quickly and are in high demand.
Most in-demand rental suburbs according to realestate.com.au figures in the six months up to February 28 2019:
|Average views per property
Belmont and Highton are the most in-demand suburbs for rental homes in the past six months. 330 Belmont rental properties attracted 417,516 views with an average of 1243 per property, while 325 properties in Highton had 342,856 views with an average of 1055.
Finding the Right Investment
By comparing vacancy rates in individual suburbs, investors can identify popular hotspots and secure high yielding properties. Vacancy rates are also a very important determinant for telling you how your properties are performing when compared to the area’s vacancy rate. However, you shouldn’t rely on vacancy rates alone. You should also look at rental yield for certain areas.
The high performers in this regard are unit markets in Lara, Norlane, Leopold, Bell Park and Manifold Heights, which shows yields ranging from 4.7 per cent to 5.2 per cent according to CoreLogic data. Meanwhile, the best returns for houses were in Marshall, Wandana Heights, St Albans Park, Breakwater and Whittington, with yields ranging from 4.3 per cent to 4.5 per cent.
It’s also important to look for quality amenities when choosing potential investment properties. Renters want things like proximity to shops, schools, green spaces and other desirable amenities in the area. Look at the features of the property itself and how well it may suit the potential renter.