INDUSTRY NEWSNationalReal Estate News

Rents surge in longest ever stretch of price growth

Australia’s capital cities are in the midst of the longest ever stretch of rental price growth, with house rents at record highs.

The latest Domain Rent Report for the March Quarter, also shows unit rents are at a record high in all capital cities apart from Canberra and Darwin.

“Across the combined capitals, we’re now seeing the longest stretch of continuous rental price growth on record as house rents rise for the eighth quarter in a row and unit rents rise for the seventh,” Domain’s Chief of Research and Economics, Dr Nicola Powell, said.

“For the first time since 2009, all capital cities have record house rents highlighting the rental crisis the country is currently going through.”

House rents have surged by $135 a week (or 31.4 per cent) and unit rents by $140 (or 34.1 per cent) since the pandemic low.

Units are seeing a solid acceleration in rental growth, particularly in Sydney and Melbourne, with Sydney unit rentals rising 6.9 per cent in the March quarter, to breaking in $600 per week territory for the first time. 

Australia remains a landlords market; however, tenants will find rental supply has begun to lift marginally, as the vacancy rate across the combined capitals is marginally higher than last month’s record low (0.8 per cent). 

“With many factors to consider, we need to see a massive change to strike the right balance between tenants and landlords,” Dr Powell said.

“No single solution can fix this rental crisis as it’s a compounding issue of the high cost of housing, insufficient investor activity, and the lack of social and affordable housing.

“Rising investor activity is needed, the build-to-rent sector advanced, additional rental assistance provided for low-income households, more social housing and assisting tenants transition to homeowners.”

PropTrack rent data released too

Meanwhile, PropTrack data shows tenants continue to face extreme financial pressure, with rents rising at the fastest rate since before the pandemic.

Surging immigration and record-tight supply have contributed to seeing advertised rents jump 11.1 per cent in the past 12 months according to PropTrack.

National advertised rents have now hit $500 per week, up a further 2 per cent, in the past three months.

PropTrack Senior Economist Paul Ryan said advertised rental prices continue to grow rapidly across the country.

“Rents nationally are up 11 per cent over the past year in response to ongoing strong rental demand and very low vacancy rates,” Mr Ryan said.

“The March quarter saw rents increase in every market except the ACT and regional South Australia.

“Capital city markets are seeing the most rapid increases in asking rents – up 4 per cent over the quarter and 13 per cent over the year.”

Source: PropTrack

Perth recorded the largest rent increase in the quarter (8.7 per cent), while Sydney (11.3 per cent), Brisbane (15.6 per cent), Adelaide (13.3 per cent) and Perth (11.1 per cent) all experienced increases of more than 10 per cent annually.

Perth and regional Victoria saw their fastest quarterly rate of rent growth since before the pandemic.

Sydney, Brisbane and Adelaide saw their fastest annual rate of rent growth since before the pandemic.

House rents were up 6 per cent over the quarter, unit rents rose 4.3 per cent, while over the past year, house and unit rents both increased by more than 10 per cent.

Mr Ryan said there was no relief in sight for renters as vacancy rates remain extremely low.

“With rental market conditions extremely tight, we expect rental prices will continue to climb,” he said.

“This is particularly the case in capital cities, where rent increases have not yet eased since accelerating in early 2022.

“In the regions, rent growth has slowed after significant rent increases throughout the pandemic.”

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Rowan Crosby

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