In a turn of events that has many Australians breathing a collective sigh of relief, the latest data on the rental market has revealed a significant slowdown in the pace of rent increases across the nation. This news is particularly welcome for those who have been feeling the pinch of rising living costs, and it could spell a period of financial reprieve for renters, especially in the major cities of Sydney and Melbourne.
For the past six months, Sydney and Melbourne have experienced a rental freeze, with median weekly rents holding steady at $730 and $570 respectively. This stagnation in rental prices is a stark contrast to the steep increases seen in 2023 and early 2024, and it marks the slowest pace of growth since late 2021. Nationally, rents have risen by just 6.9 per cent year-on-year, a rate that is more manageable for many households.
According to the REA Group Market Insight report, this slowdown is a sign that the rental market is beginning to balance out. PropTrack senior economist Paul Ryan suggests that rental demand is moderating, and landlords are having to adjust their expectations to align with what tenants can realistically afford. This shift is likely influenced by a combination of factors, including elevated rates of investor activity and properties taking longer to lease out, which has reduced the pressure on renters.
Despite this easing of rental market tensions, Sydney’s prices remain the highest among Australia’s capital cities. However, the trend of moderate growth is expected to continue beyond the seasonally busy period of January and February, when rent increases are typically seen due to new leases for university students and job-related relocations.
Melbourne, on the other hand, is emerging as the most affordable capital city market for renters, thanks in part to a strong housing construction sector that has helped keep prices lower than in other markets. Similarly, the ACT has seen stable rents throughout the year at $620 per week, attributed to new builds in the area.
Brisbane and Adelaide have also been hotspots for housing, with median rents at $630 and $580 respectively. Brisbane’s rental prices have increased by 5 per cent over the past year, while Adelaide’s have jumped by 7.4 per cent. However, both cities have seen a halt in price growth in the previous quarter, indicating a potential plateau in the market.
Perth has recorded the largest capital city yearly increase, with an 8.3 per cent rise in rents, bringing the median price to $650. The city’s popularity has surged due to its previously affordable market, but slower home-building rates have pushed rental prices upward.
Have you observed any changes in rental prices where you live? Are you thinking about making a move to take advantage of the current market trends? We’d love to hear your thoughts and experiences in the comments below.
Also read: Was 2024 ‘as bad as it gets’ for rents? Here’s what we can expect next year
