Australian Rental Markets Experience Substantial Increases, Putting Pressure on Tenants

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As the rental markets in Australia continue to heat up, it is becoming increasingly difficult for tenants to find affordable housing, particularly in New South Wales (NSW) and major capital cities. According to reports by Fiona Killman from Suburbtrends and Eli Green from PropTrack, rents have increased significantly in the past year, putting immense pressure on renters.

According to new data from the Suburbtrends Rental Pain Index, as reported by Killman, areas in NSW such as the Riverina suburb of Deniliquin and greater Western Sydney are experiencing the greatest strain. For instance, Deniliquin, the suburb that topped the list, saw an 18 per cent average rental increase over the past year amidst a tiny 0.4 per cent vacancy rate1. Additionally, several other NSW suburbs witnessed annual rent increases of 20 per cent or above, including Belmore, Belfield, Auburn, Lakemba, and Punchbowl.

In this context, Kent Lardner, Suburbtrends founder, notes, “The Rental Pain Index, a metric that measures the financial strain of renting, is highest in QLD, followed by SA and NSW. This suggests that tenants in these states are feeling the greatest ‘rent pain’ at present”.

While the rental vacancy rates in Sydney experienced a slight increase, according to the PropTrack Market Insight report, the overall scenario remains challenging for renters. Paul Ryan, PropTrack senior economist, comments, “Despite this modest improvement, conditions remain extremely tight for renters, as Sydney’s rental vacancy rate has halved on pre-pandemic levels”.

Meanwhile, a report from PropTrack, as highlighted by Green, indicates that advertised rents rose by 2.0 per cent in the June quarter to sit at a median of $520 per week, an increase of 11.8 per cent compared to the previous year. Moreover, rents in capital cities have increased by a “staggering” 17 per cent over the year, led by Sydney and Melbourne.

Reflecting on this trend, Angus Moore, report author, states, “Rental markets continue to be extremely challenging for renters, with rents surging across much of the country amid strong demand and very limited availability”.

Further compounding the issue, unit rents in Sydney have risen by 19.0 per cent in the past year, followed by Melbourne at 17.5 per cent and Brisbane at 15.3 per cent2. Moore suggests that while rental vacancy rates appear to have stabilized, national rent growth may slow down.

While this ongoing crisis places a heavy financial burden on renters, it also underscores the urgency to address housing affordability and rental market conditions across Australia.

References:

New data reveals where rental pressure is hitting hard across NSW by Fiona Killman https://www.realestate.com.au/news/new-data-reveals-where-rental-pressure-is-hitting-hard-across-nsw/  

‘Staggering’ rent rise recorded in Australian capital cities by Eli Green https://www.news.com.au/finance/real-estate/renting/staggering-rent-rise-recorded-in-australian-capital-cities/news-story/ecd8ecf9c6f7a73101b83bb232ebb945