In this episode we challenge the idea that a 2 or 3 percent vacancy rate is the sign of a balanced rental market. Using national data, city level comparisons and long term vacancy and rent growth trends, we show that today’s market is far tighter, with balance looking closer to 1 percent in many cases. The episode also explains how vacancy is measured, why the relationship between vacancy and rent growth is real but not exact, and why investors should stop using hard vacancy cut offs to rule markets in or out. The takeaway is simple. Read vacancy in context, understand what it says about rental pressure, and let the b...
In this episode we challenge the idea that a 2 or 3 percent vacancy rate is the sign of a balanced rental market. Using national data, city level comparisons and long term vacancy and rent growth trends, we show that today’s market is far tighter, with balance looking closer to 1 percent in many cases. The episode also explains how vacancy is measured, why the relationship between vacancy and rent growth is real but not exact, and why investors should stop using hard vacancy cut offs to rule markets in or out. The takeaway is simple. Read vacancy in context, understand what it says about rental pressure, and let the broader data do the heavy lifting.
Episode Highlights:
00:00 - Introduction
01:10 - How is vacancy rate calculated
04:20 - Typical vacancy now - Houses
07:58 - Typical vacancy now - Units
08:56 - Melbourne vacancy now - Houses
09:49 - State capitals vacancy history - Houses
12:22 - Australia vacancy vs rental growth - Houses
18:46 - What indicates balance?
23:10 - Jeremy’s advice
28:17 - Conclusion
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