Glossary · Australian property
Vacancy rate.
The share of rental properties unoccupied at a point in time, expressed as a percentage.
Vacancy rate measures rental supply tightness. A 1% vacancy rate signals a market with strong tenant demand and rapid relets. 4%+ signals oversupply or weak demand.
In Australia, vacancy is typically reported quarterly per suburb or LGA. The numerator is unoccupied rental dwellings on a sample date. The denominator is total rental stock. Below 2% indicates a landlord's market. Above 3.5% indicates a renter's market.
Used in cashflow modelling to forecast rental-income volatility. A 2% vacancy assumption is conservative for most Australian metropolitan suburbs through-cycle.
Source
NSW Fair Trading bond-lodgement data, REIA quarterly reports.
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