The number of rental listings advertised in Australia’s capital cities has reached a two-decade low, according to PropTrack.
Combined capital city total rental listings were down 26.3 per cent year-on-year, according to the December release of the PropTrack Rental Report.
That’s the lowest level they’ve been since February 2003 and follows a year where increased migration and the end of pandemic restrictions saw a resurgence in city rental markets.
It was a different story for regional areas, according to the report.
An easing in the rush to make a tree or sea change resulted in listing numbers there jumping 9.8 per cent higher than the year prior, the largest increase since June 2014.
“While some of the pressures evident in regional rental markets in recent years appear to be
easing, the market continues to tighten in the major capital cities,” PropTrack Director of Economic Research, Cameron Kusher said.
The largest decline in listings was experienced in Melbourne (down 16.8 per cent), regional NT (down 15.1 per cent) and Darwin (down 14 per cent).
The biggest increases were felt in Canberra (up 26.6 per cent), Perth (up 23.8 per cent) and regional NSW (up 21.7 per cent).
The total number of rental properties listed on realestate.com.au (across all markets) fell by 11.6 per cent between November and December.
They fell 19.5 per cent over the 12 months to remain at a level not seen since mid-2003.
Rental listing squeeze unlikely to improve
While conditions would continue to ease in the regions it was unlikely the capital city rental squeeze would improve in 2023, Mr Kusher added.
“With people now returning to capital cities and overseas migration lifting, it looks as if it will only become more difficult to rent a property in the capitals during 2023,” he said.
“With low volumes of stock available for rent at a time when demand for rentals is strong and is
likely to increase further, we expect the market to remain extremely challenging for renters.”
The report also showed that the number of enquiries for each rental listing was up 31.3 per cent in the capitals and down 30 per cent in the regions.
Rents increased 10 per cent in capital cities over the year to December and 7.1 per cent in the regions.
Australia’s two largest cities were bearing the brunt of increased rental demand, Mr Kusher said.
“In Sydney and Melbourne, the two largest rental markets in the country, rental stock is reducing
quickly and demand for rental properties is increasing,” he said.
“Most of the overseas migration that will occur over the coming years will be in these two cities, which will increase demand for rental accommodation.”
Mr Kusher said a solution for increasing rental stock was desperately needed.
“There remains an immense need for more rental accommodation, particularly in the major
capital cities,” he said.
“It’s critical that we find ways to create more supply – either through increased investment or more build-to-rent projects – or we reduce demand, which seems unlikely.”