INDUSTRY NEWSNationalReal Estate News

Early signs of relief as rents finally decline

There are finally some early signs of relief for tenants, with capital city rents declining and vacancy rates creeping up, according to new data.

However, the rental crisis is still far from over.

According to SQM Research, rents fell 0.5 per cent over the past 30 days across the capital cities, driven by falls in Sydney and an unchanged reading out of Melbourne.

The fall represents the largest monthly percentage decline in rents at the capital city level since April 2020.

Sydney advertised rents drove the capital city decline, falling by 1.1 per cent to $844 a week.

Darwin recorded the largest monthly decline in rents, falling by 6.3 per cent to $566 a week. 

Melbourne rents were unchanged for the period at $635 a week.

Meanwhile, Adelaide recorded a fast rental rise with advertised rents rising 2.1 per cent to $593 per week.

The national median weekly asking rent for a dwelling is now $624 per week. 

Sydney continues to have the highest weekly rent for a house at $1,050 per week, while Hobart offers the most affordable unit rents among the capital cities at $463 per week.

Managing Director of SQM Research, Louis Christopher, said while there were signs of relief, the crisis is not done yet.

“As forecasted in our last update, we have recorded an easing in rental vacancy rates for May, but the rental crisis is still far from over at this stage,” Mr Christopher said.

“The immediate outlook is vacancy rates are set to rise somewhat into winter. 

“This is the normal seasonality we get at this time of year so one should be a little careful about reading into these rises. 

“Nevertheless, it might provide some minor relief to tenants who still have excessive difficulties in finding longer-term rental accommodation around the country.”

Source: SQM

According to SQM, Sydney recorded a rental vacancy rate of 1.4 per cent, with 10,309 rental dwellings vacant, up from 1.2 per cent recorded in the previous month. 

Melbourne also recorded an increase in its vacancy rate of 1.3 per cen , up from 1.1 per cent in April 2024. 

Over the past 12 months Sydney experienced a slight decrease of 0.1 per cent, while Melbourne’s vacancy rate increased by 0.1 per cent compared to May 2023.

Canberra again recorded the highest rental vacancy rate out of any state and territory at 1.8 per cent, which increased from April 2024 by 0.1 per cent. 

While Perth and Adelaide equally recorded the lowest vacancy rate at just 0.6 per cent. 

Darwin experienced the largest change, with rental vacancies falling from 1.1 per cent in the previous month to 0.9 per cent in May, indicating the recent falls in Darwin rents could be temporary.

Vacancy rates in the Sydney CBD, Melbourne CBD, Canberra CBD, and Brisbane CBD all recorded large rises in rental vacancies, indicating that demand for inner-city student rental accommodation is currently easing.

The total number of rental vacancies Australia-wide now stands at 35,641 residential properties, which was up from 33,177 vacancies recorded in April.

Mr Christopher said despite the uptick in vacancy rates, there was still a long way to go.

“The full-year outlook remains the same in that we expect overall tight vacancy rates to be with us for 2024, driven by a fall in dwelling completions relative to ongoing growing demand,” he said.

Show More

Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.