Market Update - Dec, 2024
Source: CoreLogic Data
The state of the national rental market at the end of 2024 was, in a word, complex. After a year of ups and downs, and several years of record-breaking growth, it seemed that things were stabilising. And this led many experts to claim that we had “passed the peak” of the recent boom.
While the data definitely supports this belief, it tells a much more nuanced story. Vacancy rates may be climbing, but they still remain in the “very low” range (below 2%) in many locations. Growth in rents may also be slowing – the 0.1% increase recorded in December was the lowest since 2018 – but remains well above the pre-COVID long-term average.
This means that, while more favourable conditions for renters may be on the horizon, that horizon is still a way off. A plateauing rent growth rate is undoubtedly better news than a spiking one, but it’s hardly a relief when rents remain near record highs. Similarly, every renter welcomes easing vacancy rates, but seeing 20 other groups at an inspection rather than 30 doesn’t exactly inspire confidence.
In short, most market segments remain very competitive.
This appears to have held true across January, which is traditionally one of the busier months for the rental market. We have seen the usual ramping up of activity as most organisations shift out of holiday mode. We have also seen the usual wave of relocations, both from interstate and overseas, and for professional and educational opportunities.
This “business-as-usual” start to the year makes it difficult to know exactly what lies ahead. However, we’re cautiously optimistic that market watchers are correct, and conditions will continue to ease.
Our key markets…
Adelaide : Despite a notable easing in several key areas, Adelaide remains the tightest capital city market. While much better than the recent record low of 0.6%, it’s 1.1% vacancy rate is still very low. It also means that quality properties continue to be leased extremely quickly, and median rents are continuing to rise.
Brisbane : After one of the sharpest increases of any major market, there has been a significant plateauing in Brisbane. Now sitting at 2.1%, the vacancy rate has eased out of the “very low” range – though remains much lower than ideal. Median rent growth has also levelled out, mostly driven by a slowing of the higher end of the market.
Canberra : Known for being highly cyclical, the Canberra rental market has heated up quickly since the start of Summer. After several slower months, the city is seeing plenty of activity, with most listings being leased within a matter of days. That said, the strength seen in recent years appears to be waning, and we expect the usual slowing as temperatures drop.
Melbourne : Looking at the top line numbers, the Melbourne rental market appears to be moving with its capital city counterparts. Most metrics suggest conditions are easing, though remain tighter than the long-term average. However, market performance varies greatly depending on location and price point, and some segments remain extremely competitive.