Market Update - April, 2024
Source: SQM Research
As 2023 was drawing to a close, it was looking like rents were finally beginning to stabilise. Median rates were still increasing in most locations, but the speed of increases appeared to be slowing. And, while there were some signs of a potential reacceleration, this was largely written off as a “temporary market adjustment”.
In short, the news wasn’t great, but there were some positive signs for renters.
Unfortunately, things haven’t played out as most expected over the first few months of 2024. In most locations, rents continue to increase, and increases appear to be gathering pace. And in locations where rents were falling, like Canberra, they have now stabilised – or even started increasing again.
While there are range of reasons for this, ongoing supply issues are undoubtedly a major factor. New listing levels remain well down on long-term averages and vacancy rates continue to fall in most locations. That said, some reports suggest demand for rental properties is also declining, as shown by falling numbers of rental listing views.
Our key markets…
Adelaide : Adelaide remains one of the country’s tightest rental markets. The city’s vacancy rate has held steady at an extremely low 0.6%, and quality properties are being snapped up at record speed. Understandably, this is placing significant upward pressure on rents, with the median rate jumping around 3.4% between December and April.
Brisbane : Despite sustained increases over the last year, the median rent in Brisbane continues to rise. Since December, it has increased by almost another 1.9%, driven by a further 0.2% decrease in the city’s vacancy rate. When compared to the other capitals, Brisbane units are particularly expensive, with a median rent that’s second only to Sydney.
Canberra : After seeing conditions ease notably late last year, the Canberra rental market has tightened significantly over the last few months. Since December, the city’s vacancy rate has dropped 0.4% and its median rent rate has increased around 2.5%. While this is at least partly due to the normal market cycle (rental activity peaks in January – February in Canberra), many believe this trend will continue over the coming months.
Melbourne : The Melbourne rental market seemed to slow late last year, with the vacancy rate rising slightly and rent growth plateauing. However, things have certainly picked up over the last few months. In addition to returning to near record low vacancy levels, since December the city’s median rent has increased almost 5.5%.