Eliza Owen (pictured above), head of residential research at CoreLogic, reported on the latest trends in Australia’s rental market, highlighting a significant rise in median weekly rent values, now at a record $627 across all dwellings.
The increase spans from Sydney’s top rate of $770 per week to Hobart's $547, marking a new pinnacle in the rental landscape, Owen said in CoreLogic’s latest Pulse article.
Following a period of relative stability, rent growth has picked up speed again at the start of 2024, with the national annual rent growth increasing from 8.1% in October 2023 to 8.5% in April. Even in areas where rents had previously been declining, such as Canberra and Hobart, there is now evidence of stabilisation and growth.
“Annual rent growth has once again started gathering pace at the start of 2024,” Owen said, indicating a renewed upward trend.
The recovery in rent growth is not confined to metropolitan areas; regional markets are also experiencing a rebound. For example, regional unit rents have risen from annual growth of 5% to 6.9%, while house rents have seen a more pronounced increase from 3.4% to 6.2%. This uptick is especially noticeable in regions like QLD and Tasmania.
The current rental market dynamics are largely driven by significant net overseas migration and limited new housing supply. With net migration reaching nearly 550,000 in the year to September, and only 173,000 new dwellings completed in the same period, the pressure on rental markets continues to intensify.
“This means overseas arrivals were particularly likely to skew to rental accommodation through the period,” Owen said.
Looking ahead, CoreLogic said the rental market is likely to remain tight with limited short-term solutions to ease the supply crunch. Renters might find some relief as net overseas migration normalizes post-COVID, but until then, the trend of seeking more affordable housing in peripheral areas or regional markets will likely persist.
“Reprieve in the rental market is most likely to come from a moderation in net overseas migration,” Owen said.
Despite the general upward trend, some areas are still below their peak rent levels, with particular regions experiencing modest declines.
CoreLogic’s analysis indicated that about 9% of SA3 rent markets are witnessing a slight dip from recent highs, with notable areas including high-end Sydney locales and desirable lifestyle regions.
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