According to Angus Moore (pictured above), an economist at REA Group, the rental market has faced significant strain and substantial rent hikes in recent years due to limited availability and robust demand.
However, recent trends indicate a shift, with rental growth beginning to decelerate, presenting a silver lining for renters.
Over the past five years, the landscape of renting has dramatically changed, with median advertised rents nationally skyrocketing by 48% from $420 per week in 2019 to $620 by the end of 2024.
A notable aspect of this surge is that lower-priced rentals have seen even more pronounced increases. For instance, the rent for properties at the 10th percentile increased by a remarkable 54%, from $280 to $430.
Geographical factors have significantly influenced these disparities.
Initially more affordable rental markets like Perth, Adelaide, and various regional areas have experienced faster rent growth compared to traditionally expensive cities like Sydney and, to a lesser extent, Melbourne.
This shift means that the locations of the most affordable rentals have also changed dramatically, Moore said.
In 2019, 30% of homes across Australia rented for less than $360, with many located in regional areas, which constituted 43% of such affordable rentals despite only making up 31% of the total rental market.
Melbourne and Sydney previously accounted for 22% of these affordable rentals, less than their overall market share. Notably, Perth stood out in 2019, hosting 14% of more affordable rentals, which was significant given its overall market share.
The current landscape shows that the more affordable rentals, now priced around $530 rather than $360, are predominantly found in Melbourne, which has not seen as steep rent increases as other regions.
Melbourne now hosts 29% of these more affordable rentals, surpassing its proportion of the overall rental market. Conversely, Perth has seen a decline in its share of affordable rentals, now underrepresented in this segment.
Despite the challenges, there are positive signs on the horizon. Rental availability is gradually improving, and the pace of rent increases is slowing. These changes are beginning to ease the conditions for renters, potentially making it easier to find affordable housing options in the near future, PropTrack reported.
This shift in the rental market highlights the dynamic nature of housing costs and the changing hotspots of affordability, signaling new opportunities for renters in different regions of Australia.