Explainer: Rental price and vacancy metrics

Cameron Murray
Additional contact information
Cameron Murray: The University of Sydney

No dbgka, OSF Preprints from Center for Open Science

Abstract: Hot rental markets generated many popular news headlines during 2022. Australian news consumers have read that “Renters are getting smashed” in Melbourne, and that the rental market is “extremely challenging” in Sydney, and ever that “Renters competing 'Hunger Games-style' as number of rental properties dwindles”.These headlines are certainly very shocking, and no doubt attract clicks. As well as rental data, vacancy rates of rental property is a metric that is commonly quoted in media reports to provide insights into the economic processes happening in the rental market. “National vacancy rates hit record low” was an October 2022 headline. But like all economic data, reported rental prices and vacancy rates need to be properly interpreted. Understanding what these metrics mean in terms of underlying economics is tricky.This note explains how several different popular rental price and housing vacancy metrics are created and provides commentary on how they should be interpreted. A clear explanation of popular rental metrics shows how it can be simultaneously true that the rate of growth of rental prices for new contracts was at record highs in mid-2022, but the average rental price paid across all dwellings was still lower than in 2018. Often different metrics have similar names but measure different things, and subject to different errors and short-term variation, which means caution is needed to use them to interpret underlying economic processes. For example, rental vacancy measures the short-term variation in advertising for rentals and should not be assumed to measure the number of unoccupied dwellings across the housing market.

Date: 2022-10-26
New Economics Papers: this item is included in nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://osf.io/download/6359ce591e47c900fd2a8796/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:dbgka

DOI: 10.31219/osf.io/dbgka

Access Statistics for this paper

More papers in OSF Preprints from Center for Open Science
Bibliographic data for series maintained by OSF ().