The PropTrack Rental Report December 2023, released today by REA Group, paints a concerning picture for renters as rental property supply reaches historic lows, setting the stage for tough conditions to persist throughout 2024.
The quarterly report incorporated seven key metrics, offering a comprehensive and up-to-date view of the rental market and emerging trends.
The report underscored the critical challenges facing renters as rental stock reaches unprecedented lows, further complicated by population growth, intensifying demand, and worsening the overall conditions.
In December, the number of new rental listings on realestate.com.au experienced a 4.6% decline compared to the previous year and was 20.7% below the ten-year average for the month. Total rental listings plummeted to a record low, experiencing a 4.7% annual decline and sitting at a staggering 30.2% below the December decade average.
Despite limited supply, the demand, measured by the number of enquiries per rental listing on realestate.com.au, remained at elevated levels, climbing by 3.3% over the year.
Rental prices witnessed a sharp surge in 2023 due to the imbalance between supply and demand, with the median advertised rent on realestate.com.au rising by 11.5% over the year, reaching $580 per week. However, this marks a slowdown compared to the 15.6% increase observed in 2022.
Cameron Kusher (pictured above), director of economic research at PropTrack, said the rental market in 2023 was defined by a combination of limited supply and robust demand. These circumstances posed challenges for renters in securing accommodation, leading landlords to raise rents –a trend expected to persist into 2024.
“While we expect rents to continue to rise this year, it’s likely that the rate of growth will slow,” Kusher said. “The already higher cost of renting and overall increase in the cost of living will limit rent price increases moving forward.”
He noted the broader implications of rising rents, making it challenging for renters to save for a property deposit, while higher interest rates pose challenges for mortgage servicing.
Nationally, investors are still exiting the market, contributing to a rebound in new investor lending, but insufficient to improve stock levels.
“With total rental listing volumes at historic lows and well below their decade average, rental conditions are likely to remain challenged,” Kusher said. “There is a critical need for additional housing, particularly in the major capital cities. Serious consideration needs to be given to the financing of these projects and the capacity to build the volume of housing we need.”
The PropTrack Rental Report covers key metrics such as rental prices, rental yields, new rental listings, total rental listings, rental vacancy, rental days on site, and enquiry per listing. For more information and the full report, visit realestate.com.au/insights.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
