The vacancy rate for rented residential properties in Melbourne, Australia has hit a six-year high in December 2011 according to SQM Research.

SQM has seen a significant rise in vacancies across Australia’s capital cities for December, although they say there is a normal seasonal increase. Melbourne however has seen an upward trend which is indicating a severe oversupply as the cities rental vacancy rate increased to 4.4% with 16,007 vacancies.

Louis Christopher, SQM managing director, said: “ Melbourne is looking ominous and we are expecting rental declines for this capital city for 2012. Melbourne has definitely become a renters market, and landlords can no longer be expected to extract higher rents in Melbourne.”

Sydney meanwhile has a vacancy rate of only 2%, an increase from 1.5% in November 2011, with almost 5000 fewer properties available to rent. This compares with a vacancy rate of 1.7% in December 2010.

Christopher said: “As for the majority of the rest of the country, it is still a landlord’s market and we are expecting rental increases overall to be within the 4-6% range and in some regions within Sydney - even higher, throughout the course of the year.”

Nationally Australia had a vacancy rate of 2.4% with 61,490 properties vacant in December, up from 1.9% in November 2011 with an increase of 0.2% annually from December 2010.