Rents in 44.4 per cent of Australia’s house and unit markets have surged at least 10 per cent in the past 12 months, on the back of rising migration and tight supply.
CoreLogic’s Mapping the Market tool shows 1700 house and unit suburbs experienced the largest increase in rents on record, with some suburbs seeing rents jump by 35 per cent.
However, In some good news for renters, the monthly increase in rents has finally started to slow, however, not all markets have seen growth fall away.
CoreLogic’s national rental index shows the rate of rental growth has softened slightly, with rents up 0.8 per cent in May compared to the 0.9 per cent and 1 per cent increases in April and March.
Of the 3812 markets analysed, only 6.7 per cent recorded a decline in rents.
CoreLogic Economist Kaytlin Ezzy said the slowdown in the monthly growth rate had contributed to a fall in the annual trend, which dipped below double digits for the first time in 10 months, with rents increasing 9.9 per cent nationally over the 12 months to May.
However, she said this was largely driven by a slowdown in regional markets, where rents increased 0.3 per cent over the month, down from a record monthly growth rate of 1.2 per cent in March 2022.
“Regional rental growth has slowed dramatically from a year ago while capital city rents were up 1 per cent in May,” Ms Ezzy said.
“When you break that figure down further by property type, we can see the unit sector is under the greatest pressure, with rents increasing at a faster rate than houses due to their relative affordability.”
Ms Ezzy said rents dropped in 225 house and 29 unit suburbs in the past year, with the majority located in Canberra and regional areas.
Sydney had 38 markets where rents declined, with the majority located on the Central Coast.
In Melbourne, just four markets saw annual rental decreases, while houses in the north-east suburb of Ascot was Brisbane’s only market to record a drop.
Melbourne also recorded the strongest month-on-month change in rents, rising 1.4 per cent in May.
“In the past year we’ve seen rents increase in every capital and rest of state region except for Canberra where there’s been a 1.9 per cent decline,” Ms Ezzy said.
“Canberra was previously the country’s most expensive rental city until Sydney overtook it in December.
“The softening rental conditions in the ACT is likely due to there being more stock on the market.”
She said Canberra’s vacancy rate had increased from 0.7 per cent in March 2022 to 2.2 per cent, putting it second behind Hobart (2.7 per cent).
“More stock means tenants have more choice and potentially more power when negotiating their rent,” she said.
According to CoreLogic, there were 4409 additional new rental listings added to the market in May compared to April, nudging the total rental supply higher.
However, new rental listings remain 11 per cent below the previous five-year average, and total rental listings remain 33.3 per cent below the long-term average.
Meanwhile, national vacancy rates increased from a record low of 1.1 per cent in April to 1.2 per cent in May.
Hobart has the highest vacancy rate of 2.7 per cent and largest rental fall of 0.7 per cent, followed by Canberra with a 2.2 per cent vacancy rate and 0.4 per cent decline in rents, while all remaining capital cities are recording vacancy rates under 1.5 per cent.
Since the onset of Covid, capital city rents have risen 25.7 per cent and regional rental values have increased 29.2 per cent, adding the equivalent of $125 per week and $116 per week.