GIPPSLAND’S rental vacancy rate rose slightly in January, leaving the status quo mostly unchanged for renters.

The January 2024 vacancy rate in Latrobe-Gippsland statistical area level 4 (SA4) is 1.52 per cent, slightly higher than the December 2023 rate, which was 1.43 per cent, according to a new PropTrack report. Quarterly, it rose by 0.08 percentage points, and annually by 0.25 percentage points.

PropTrack economist and report author, Anne Flaherty, said it remained a very low vacancy rate that was about half of what would be considered a “healthy vacancy rate” of about three per cent.

Ms Flaherty said the new number, an increase of 0.09 percentage points, was “relatively negligible”.

“When we’re seeing vacancy rates getting this low, it does mean that it’s a really tough market for tenants,” she said.

“It means that there’s very strong rental demand relative to the supply of properties available.

“During the pandemic, we saw an enormous number of people move from Greater Melbourne into regional Victoria, which really drove down that vacancy rate across the Gippsland region and across a lot of other regional markets.

“Now we’ve seen that trend flow somewhat and we have seen people move back towards the city. So that’s part of the reason why we’re seeing vacancy rates ease.”

The Reserve Bank met on February 6 and decided to keep interest rates on hold. Ms Flaherty said she didn’t believe the decision would have much of an impact.

“I think that if we do continue to see interest rates remain stable or even potentially decrease, that will be good news for the housing market in the sense that it will help lead the recovery in buyer and seller demand,” she said.

“A second cohort of people who may be in the rental market have felt nervous because of the potential of further interest rate rises. So if we do have a more stable interest rate environment, it may drive somewhat of a recovery in that by demand.

“(But) interest rates don’t directly impact vacancy rate.”

High population growth and more investors selling property to owner-occupiers are also contributing to low vacancy rates.

Latrobe-Gippsland statistical area level 4 (SA4) includes all six Gippsland LGAs, including Wellington. It’s a geographical area the Australian Bureau of Statistics (ABS) uses to classify different regions.