Market Update - Sept. Qtr, 2023
Based on several key metrics, it really seems like the rental market is starting to stabilise. Most significantly, growth in the national median rent has slowed from a peak of 2.6% over the 3 months to April, to 1.6% over the 3 months to September. There is also an increasing number of locations where the median rent remains stable or has actually started to decrease.
That said, it remains extremely difficult to find and secure a rental, with the market more competitive than it’s ever been. This is due to chronic supply issues, which have driven national listing levels down to the lowest they’ve been since November 2012. This, in turn, has pushed the national vacancy rate further down, to a new record low of 1.1%.
When read in combination, these trends tell the story of the affordability issues many renters are facing. Falling vacancy rates would usually mean renters have to pay more to secure a place, speeding up growth in rents. But, right now, many renters simply do not have more to spend, so prices are starting to plateau, as more cost-effective options are sought.
Key Trends We’re Watching
Houses v Units: Until recently, the median unit rent had been rising noticeably faster than the median house rent. In fact, the gap between the two went from $62 per week in December to $34 per week in June. However, this trend has begun to reverse, with the gap rising back up to $36 per week in September. This is another sign of increasing affordability issues and reflects a move back toward larger households, as renters look to save money by sharing.
Varying market performance: Growth in median rents varies wildly across the country, with each capital city market recording notably different results. For example, over the 3 months to September, rents have increased significantly in Darwin (up 3.3%) and Brisbane (up 2.5%). However, they have actually fallen in Canberra (down 0.9%) and Hobart (down 2.7%) over the same period.
Australia’s most affordable capital: Sydney remains the most expensive capital to rent in, with a median rent of $726 per week. However, declining prices in Hobart have seen it become the cheapest capital, with a median rent of $529 per week. It took this mantle from Adelaide, where the median rent now sits at around $548 per week.