Australian capital cities have seen the largest monthly rent declines since the onset of COVID, with an overall drop of 0.5% in dwelling rents, SQM Research reported.
Sydney led the decline, with a 1% decrease to $829 per week. Other cities like Melbourne, Brisbane, and Perth also experienced rent falls, surprising many observers.
“The falls were broad-based, with the larger falls recorded in our larger capital cities and regional coastal locations,” said Louis Christopher (pictured above), managing director of SQM Research.
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Despite the drop in asking rents, the national rental vacancy rate remained unchanged at 1.3%, indicating a continued shortage in the rental market.
Sydney and Melbourne saw stable vacancy rates of 1.7% and 1.5% respectively, while Canberra recorded the highest rate at 2.2%. In contrast, cities like Perth and Darwin experienced a tightening in their rental markets with rates dropping to 0.7%.
Coastal regions and certain CBD locations were particularly affected by the rental price drops.
Queensland’s Gold Coast and Victoria’s Mornington Peninsula recorded declines of 1% and 1.4%, respectively. Sydney’s CBD saw a significant decline of 1.6% in rents, reflecting a shift in market dynamics.
Louis Christopher (pictured above) of SQM Research highlighted that while the rental declines are noteworthy, the rental crisis is far from over.
“Rents are still very high... but this will be somewhat welcoming to tenants,” Christopher said, emphasising that the era of dramatic rental increases may be ending.
However, with a national vacancy rate still low, the market remains tight.
The recent decline in rental prices, though minor compared to the significant rises since 2021, offers some relief to tenants.
The total number of rental vacancies across Australia slightly decreased, yet remains higher than a year ago, suggesting a gradual market adjustment, SQM Research reported.
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