Rental demand appeared to ease in June, with the average number of rental property enquiries per listing falling by 4.6% compared to the same time last year, according to Karen Dellow (pictured above), PropTrack’s senior data analyst.
Despite a 46% increase in median weekly rent over the past five years and a 9.1% rise in the past year, rents have remained unchanged at $600 for the past five months.
In the combined capital cities, the weekly rent increased by 3% over the quarter to $640 per week, a slower growth rate than the same quarter last year, when rents grew by 5%.
See LinkedIn post here.
In contrast, the combined regional markets experienced higher growth, with rents increasing by 4% over the recent quarter to $540 a week, compared to just 2% in the same period last year.
A significant factor influencing the slowing of rent price growth in capital cities is the decreased demand for properties.
The average number of enquiries per listing in the combined cities was 23.6 in June 2024, a 10.8% drop from the previous year.
“Despite the decrease in demand, the availability of rental stock remains critically low,” Dellow said.
This paradox can be explained by the various alternatives available to renters struggling to find a property to lease, such as purchasing a property or opting for shared accommodation.
Recent lending data shows a 5% increase in owner-occupier home loans in May and a 6% rise in loans to first-home buyers compared to the same time last year.
For those unable to afford buying, shared accommodation presents another viable option.
The platform Flatmates.com.au has reported record numbers of renters searching for rooms and an unprecedented number of rooms available for rent.
For those still seeking rental properties, some areas are experiencing less competition.
In Hobart, the average number of enquiries per listing in June was five, a 38% drop from last year. Similarly, Melbourne’s South East saw 33% fewer enquiries, and Sydney’s Ryde had a 29% decrease.
Conversely, some areas have seen a rise in enquiries. In Melbourne’s West, there were 22 enquiries per listing in June, a 76% increase. Adelaide’s South region saw a 75% rise, making it the most in-demand area in Adelaide for June.
The struggle for renters to find and afford properties continues, exacerbated by rising prices and low rental vacancies.
Although the pace of growth in the median weekly rent has slowed and the rental vacancy rate has slightly increased, the moderate decline in enquiries per listing might persist as renters opt to buy or share housing due to high rental costs.
Nonetheless, rental enquiries are likely to remain high due to ongoing excess demand and limited supply.
For further details, read the PropTrack analysis and the PropTrack Rental Report - June 2024 Quarter.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
