tom123Participant@tom123Join Date: 2013Post Count: 91
Hi all i was wanting to know what the calculation was for figuring out the vacancy rate for a suburb, and which is the best way to get the information needed for the calculation.
Cheers, TomJacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539BennyModerator@bennyJoin Date: 2002Post Count: 1,376
As JacM said, the API mag can be good, but it will often be two or three months in arrears. Still, it can provide a “history” of a suburb if you are wanting to observe that suburb over time.
Another way to consider (especially if you are buying in your own area – but then, there is always the phone, eh?) and that is to talk to your friendly RE agents. Ask them how many properties they have on their rent roll, and how many they have vacant. This can lead to “spikes”, but their words can also give a feel for the vacancy rate – e.g. “We can’t get enough homes to rent!”).
If you talk with 3 or 4 RE agents, and they all have very few homes on a large rent roll, then this might be a more up-to-date answer anyway.
The calculation is simply “Homes available for rent, divided by total homes able to be rented” So, if an agent has 200 on rent roll, with just 4 available today, that is a 2% vacancy rate. (4/200 = 2%)
Bennytom123Participant@tom123Join Date: 2013Post Count: 91
Thanks guys very helpful!Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
… or you can attend the open for inspections for properties in the target area. You will observe current demand very quickly in this way. If you see queues of people at the front of the property (like the queue at the bbq at Bunnings) waiting for the open, and several people asking for application forms, that shows you demand. Go inside and listen to what people are saying to understand what the features are that are attracting the people.mattstaParticipant@mattstaJoin Date: 2011Post Count: 604
Personally I use the SQM Reseach for vacancy rates. It’s free to use their vacancy rate platform as well, which is very useful.
Other than that I prefer to physically check out the suburb and get a feel for the vacancy, by driving around and talking to RE agents and other investors who have invested in the area.