This research is the first critical analysis of the Australian private rental vacancy rate (RVR) – an important, but often unquestioned, housing market signal. It investigates the different methodologies, strengths and limitations of the measure, and how it is used and interpreted. 

Policymakers and developers commonly use RVRs to guide decisions about where and when to build housing, and for rental providers, they can be a signal to raise rents. A comprehensive understanding of this measure is therefore crucial, particularly during a housing crisis. 

This research presents a detailed examination of this key housing market indicator to better inform decision-making in public and private sectors.

Key points

• RVRs are provided only by commercial organisations, using methodologies that are often opaque and produce different outcomes.
• Using Victoria as a case study, statistical modelling of RVRs and explanatory variables (2011–24) showed evidence of an equilibrium vacancy rate in Melbourne and regional Victoria.
• Regional Victoria was slower to return to this rate following structural shocks (e.g. COVID-19), suggesting that policy formulation and intervention needs to be spatially nuanced.
• The commodification of property data, including RVRs, can make them expensive, resulting in unequal access to information for housing market decision-making processes.
• Australia differs from other countries by focusing on rental vacancy rather than overall dwelling vacancy, and by not having a government-produced vacancy rate.